Italian carmaker Fiat has alerted the United Auto Workers’ retiree health-care trust, VEBA, of its exercise of its option to buy a portion of the interest held in Chrysler by the fund. After the transaction, Fiat will own 61.8 percent of Chrysler.
VEBA holds a 45.7 percent stake in the Detroit-based car maker.
The operation is expected to occur in the coming weeks, Fiat said in a statement.
However, it will have to wait until next January before it can purchase another 3.3%.
Fiat declined to say how much it will pay for the stake. It said the exercise price, according to an agreement with VEBA, will be based on “a market multiple” of Chrysler’s earnings before interest, taxes, depreciation and amortization, or Ebitda, for the most recent four quarters, less net industrial debt.
An auto analyst, asking not to be named, said a ballpark figure for the price could be 200 million euros ($252 million), Reuters reports.
Fiat shares were up rose 2.45 percent by 1103 GMT, outperforming a 0.7 percent rise in Milan’s blue-chip stock index.
Fiat is interested in getting “100 percent” of Chrysler, Sergio Marchionne, who runs both automakers, told reporters in Turin last month after Fiat’s annual shareholders meeting.
“The mechanism is subject to negotiations and market conditions,” while it’s “highly unlikely” the merger will occur this year, he said.