Fiat ups Chrysler stake to 30 percent

12/04/11 19:13 CET

corporate

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Fiat has increased its stake in Chrysler from 25 percent to 30 percent.

The move by the Italian firm comes after the US carmaker surpassed an international sales target and reached a pact to expand its presence outside North America through Fiat’s dealer network.

Those were conditions set by the US government – which bailed out Chrysler in 2009 – before Fiat would boost its stake.

When it took control of Chrysler, Fiat declined to put any cash into the carmaker. But the US Treasury agreed Fiat could boost its stake in stages if the Chrysler met three tests designed to put it on firmer financial footing.

Chrysler met the first test in January when it produced a fuel-efficient engine at a formerly-idled plant in Dundee, Michigan. The final test is expected to be met in the fourth quarter, when Chrysler produces a 40-miles-per-gallon car built on the Fiat platform.

After that Fiat has the chance to buy an additional 16 percent of Chrysler. Chief executive Sergio Marchionne has said one of his main goals this year is to take Fiat’s ownership of Chrysler to 51 percent.

More about: Car industry, Chrysler, Fiat, Markets

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