Italian family business Fiat has welcomed in the New Year by signing an agreement to purchase the remaining stake it does not already own in US carmaker Chrysler.
The $3.65 billion (€2.67 billion) agreement ends a stand off between Fiat, which is owned by family-controlled holding company Exor, and a retiree healthcare trust over the value of the company.
Veba, associated with the United Auto Workers union, argued its 41.5% stake was worth $5 billion, while Fiat said it was worth half that amount.
The deal, signed on 1 January, allows non-family chief executive Sergio Marchionne to pursue his goal of creating the world’s seventh-largest automotive group, and will also make it easier for the two companies to merge their finances.
The agreement puts an end to Fiat’s planned partial listing of Chrysler, scheduled for the first quarter of this year, which was intended to resolve the on-going negotiations over the value of the company.
Chrysler will contribute $1.9 billion cash to the deal, while Fiat will put up $1.75 billion.
Once the deal closes, Chysler will give the trust, which manages and pays medical benefits for employees, an additional $700 million.
Fiat bought its stake in Chrysler as it emerged from bankruptcy in 2009, and it has seen sales increase nearly 50% since then.
Exor, established by the Agnelli family in 1927 and now overseen by fifth-gen John Elkann, owns a 30% stake in Fiat.