Shares in Italian carmaker FIAT Spa rose as much as 16 percent in early trade on Thursday, after the company announced yesterday that it reached an agreement to acquire the remaining 41.5 percent of Chrysler for $3.65 billion.
Most of the money will come from Chrysler, while Fiat will pay only $1.75 billion.
The announcement was unexpected and ends a year of intense talks that have obstructed Chief Executive Sergio Marchionne’s efforts to combine the two automakers’ resources.
“They paid less than the market had expected and there will be no capital increase to fund this, so no wonder the stock is flying,” a Milan-based trader said.
At 11:33 AM GMT+1 (Milan’s local time) shares in Fiat were up 12.7 percent up at 6.7 euro / share.
“Thanks to the unified ownership, we can now implement our vision of a global car manufacturer,” Group CEO Sergio Marchionne on Wednesday in Turin.
The deal is expected to be completed on January 20 and Marchionne plans to list share in both Milan and New York.
Chrysler earned $464 million in the third quarter while Fiat only $260 million. However, without Chrysler, Fiat would have lost more than $340 million in the third quarter.
by Mircea Serafim
) - Thursday, January 2nd, 2014 - filed under Chrysler
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