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LONDON - The clear signal from the U.S. Federal Reserve that it will soon stop pumping money into the global economy and data pointing to Chinese growth slowing sparked sharp falls in bonds, shares and commodities on Thursday.
DETROIT - A new company hopes to make the car-buying process easier for consumers and more efficient for dealers by bringing cars to buyers for test drives, avoiding the need to spend hours at a dealership.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.
Fiat ups Chrysler stake in move towards merger
MILAN/DETROIT (Reuters) - Italy's Fiat SpA (FIA.MI) has raised its stake in Chrysler Group LLC by 5 percent to 58.5 percent, meeting a final target set by the U.S. government as the two groups move closer to creating one of the world's leading auto makers.
Fiat has managed Chrysler since a 2009 bailout deal with the U.S. government. It has paid a total of around $2 billion for its majority stake and agreed a number of conditions to be met before a full merger could take place.
Sergio Marchionne, CEO of both groups, has made Fiat one of Europe's top turnaround stories and wants to elevate the company to a global player through Chrysler.
"The acquisition of a further 5 percent of Chrysler is a fundamental step in completion of the integration between our two groups," Marchionne said in a statement on Thursday.
Chrysler and Fiat said they had formally committed to the U.S. Treasury Department to produce the 2013 Dodge Dart sedan at a Chrysler plant in Illinois, the last performance event of three agreed with Washington in 2009.
That commitment, along with proving late last month to the U.S. Environmental Protection Agency that the new Dart can achieve an unadjusted combined fuel economy of 40 miles per gallon, triggered the 5 percent ownership increase. The group had said it would reach the target by the end of 2011.
The remaining 41.5 percent ownership of Chrysler remains with a healthcare trust, called VEBA, affiliated to the United Auto Workers union.
Marchionne told Reuters in December it was possible Chrysler would have an initial public stock offering in 2013 as the UAW seeks to cash out or reduce its shareholdings.
Analysts have said that the biggest savings would come from a full integration of the two automakers to give the combined company the scale Marchionne has said is needed to compete as a global manufacturer.
Fiat, burdened by 5.8 billion euros of net industrial debt at end-September, might find it costly to buy the VEBA stake should the trust decide to sell.
Chrysler has become Fiat's chief source of strength this year, comprising two-thirds of Fiat's third-quarter profit. In December Chrysler's U.S. sales increased by 37 percent on the month and by 26 percent year-on-year.
Marchionne has said his aim is to make the group one of the top 5-6 auto makers in the world. The group is targeting global sales of 6 million units by 2014, a target that many analysts see as overly ambitious.
In the last year, Fiat increased its share in Chrysler five times. It has achieved all three performance events agreed with the U.S. Treasury.
Chrysler also paid back loans from the U.S. and Canadian governments six years early and exercised options to increase ownership.
Fiat shares gained 3.6 percent on Thursday while the Italian blue-chip index .FTMIB fell 3.7 percent. The European auto sector .SXAP gained 2.9 percent.
(Additional reporting by Antonella Ciancio; Editing by Helen Massy-Beresford)
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