As of January 21, 2014, Fiat is the sole owner of Chrysler Group, following the acquisition of the all the VEBA Trust’s membership interests in the U.S. carmaker. Following the January 1 announcement, Fiat paid VEBA (Voluntary Employees’ Beneficiary Association), a retiree healthcare trust affiliated with the UAW, the sums stipulated in the contract.
As part of the deal, Chrysler Group has paid a special distribution of $1.9 billion to the VEBA Trust, while Fiat North America has paid $1.75 million. Both Fiat and Chrysler funded the operations from available cash on hand.
As previously agreed with the UAW, Chrysler Group will also pay the VEBA Trust an aggregate of $700 million in four equal annual installments, the first of which was paid on January 21 in connection with closing of the transaction with Fiat.
Fiat and VEBA spent a year and a half in a dispute over how to value the trust’s stake. Fiat’s board will meet on January 29 to lay out terms of the merger of the two carmakers, including the corporate organization, the location of its headquarters and main stock listing.
Fiat and Chrysler CEO Sergio Marchionne is expected to remain in charge through at least 2016 to merge the companies into a single global automaker. According to his estimate, Fiat and Chrysler together are the seventh-biggest carmaker worldwide. The two carmakers sold about 4.4 million vehicles in 2013, less than half the annual deliveries of Toyota, GM and VW.
By Dan Mihalascu
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