Fiat pays no cash for 35% stake in Chrysler

We reported this morning that Fiat had confirmed that they were in talks with Chrysler over some sort of partnership. It has now been confirmed that Fiat will have a 35% stake in the U.S. automaker, and they have paid no cash in the deal.

For the 35 percent stake, Fiat will have to exchange its technological expertise, distribution network and management services to Chrysler. This deal will benefit both companies, Fiat will be able to get into the huge American market, and Chrysler will be able to show the U.S. Treasury that they are working on more environmentally friendly vehicles, something that should get them more aid.

Chrysler’s majority owner, Cerberus Capital Management, a private-equity group will see their 80% stake in the third largest U.S. automaker diluted. Last year Fiat sold 2.5 million vehicles worldwide, Chrysler sold 2 million cars and trucks in the same year.

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