Fiat boosts stake in Chrysler to 61.8 percent
MILAN (Reuters) - Italian carmaker Fiat (FIA.MI) is to exercise an option to buy around 3.3 percent of U.S. peer Chrysler from the VEBA trust fund, boosting its stake to 61.8 percent.
Chrysler, which offers Fiat a foothold in the North American market to offset weak car sales in Europe, has boosted the Turin-based carmaker's results in recent quarters.
The alliance also strengthens Fiat's position through joint-purchasing and shared investments.
Fiat holds options to purchase up to 40 percent of Chrysler owned by union healthcare trust VEBA, or the Voluntary Employees Beneficiary Association, which can be exercised until end-June 2016.
The purchase, which was largely expected, should occur in coming weeks, Fiat said on Tuesday.
The price would be based on a multiple - not exceeding Fiat's multiples - of Chrysler's core earnings in the past four quarters less net industrial debt, it said.
An auto analyst, asking not to be named, said a ballpark figure for the price could be 200 million euros ($252 million).
Sergio Marchionne, chief executive of both Fiat and Chrysler, had said in recent months there was a "better than 50 percent chance" Fiat would buy a small stake in Chrysler from VEBA in July.
Fiat shares were up rose 1.9 percent by 0755 GMT, outperforming a 0.6 percent rise in Milan's blue-chip stock index .FTMIB.
($1 = 0.7947 euro)
(Reporting by Valentina Za and Stephen Jewkes; Editing by Dan Lalor)
WASHINGTON - The Federal Reserve on Wednesday embarked on the risky task of winding down the era of easy money, saying the U.S. economy was finally strong enough for it to start scaling down its massive bond-buying stimulus. | Video
WASHINGTON - Start-up companies will be able to raise much more capital through certain public stock deals without facing costly regulatory burdens under a proposal announced by U.S. securities regulators on Wednesday.
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.