The federal government has severed its remaining ties to the once-bankrupt Chrysler Corp., Italian automaker Fiat buying up the Treasury’s remaining shares in the Detroit maker.
Sergio Marchionne, CEO of both Fiat and Chrysler, is expected to follow that news by announcing a global realignment next week, which will mark the next critical step in merging the two makers into a trans-Atlantic giant. Fiat has steadily increased its stake in the U.S. maker after receiving a 20% share following Chrysler’s emergence from Chapter 11 protection in June 2009.
Fiat paid $560 million for the government’s 98,461 shares, boosting its holdings by 6%. Meanwhile, it paid another $125 million to purchase the 1.5% stake held by the Canadian government, which also offered Chrysler a helping hand during its emergence from bankruptcy. In all, the Italian automaker now owns a 53.5% stake in Chrysler.
The U.S. maker received a total of $12.5 billion in assistance, starting in late 2008. Since then, the maker has repaid $11.2 billion, fully covering the bailout provided by the Obama Administration. But Marchionne has said he does not plan to cover the additional funds that were initially provided under the term of former President George W. Bush.