Fiat has reached an agreement with the U.S. Government that will give Fiat 52 percent of the shares in Chrysler and therefore the final controlling majorioty. The Treasury said on Thursday it will sell its remaining 6 percent equity stake in Chrysler to Italy’s Fiat in a deal that will net Washington $560 million, Reuters reports.
According to a statement of the Department of the Treasury, “The expected total proceeds to Treasury from this transaction are $560 million. Fiat agreed to pay Treasury $500 million for Treasury’s 98,461 shares of Chrysler. Treasury also held the right to proceeds above a certain threshold received by the UAW retiree trust from the trust’s sale of Chrysler equity, as well as a right to purchase all of the shares retained by the UAW retiree trust for a certain threshold amount – which Fiat will purchase for $75 million. Treasury will receive 80 percent of the proceeds ($60 million) from that $75 million, while the Government of Canada will receive 20 percent of the proceeds ($15 million).
The Obama administration invested $12.5 billion in Chrysler. Chrysler will have returned more than US$11.2bn of that amount to taxpayers through principal repayments, interest, and cancelled commitments.
“Treasury is unlikely to fully recover the difference of $1.3 billion,” the government statement said.