Fiat North America will acquire the remaining 41.5 percent of Chrysler Group held by the UAW’s Voluntary Employee Beneficiary Association Trust or VEBA, the Italian automaker announced Wednesday. The deal gives Fiat total ownership of its U.S. partner and is valued at $4.35 billion.
“In the life of every major organization and its people, there are defining moments that go down in the history books,” says Sergio Marchionne, chief executive of Fiat and chairman and CEO of Chrysler Group. “For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments.”
Marchionne says the new structure will allow Fiat to “fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective, and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment.”
The VEBA Trust, which provides medical benefits to UAW-represented Chrysler retirees, surviving spouses, and dependents, will receive $3.65 billion as part of the transaction. Additionally, Chrysler will pay $700 million in four annual installments after the deal closes.
“This agreement is in the best interests of the trust’s UAW Chrysler retiree members and their families who rely on the trust to provide vital health care benefits,” says Robert Naftaly, chair of the committee that governs the trust.
As part of the deal, the UAW will continue to support the industrial operations at Chrysler and the further implementation of the Fiat-Chrysler alliance, Fiat officials say.
The transaction is expected to close on or before Jan. 20.