Fiat said today that it has notified the UAW Retiree Medical Benefit Trust of its intent to purchase an additional 3.3% of Chrysler shares.
By exercising its call option the Italian automaker would increase its stake in Chrysler from 58.5% to 61.8%. The UAW Trust, which manages health care for Chrysler's UAW retirees, currently owns 41.5% of Chrysler's shares.
Fiat said it expects to complete the purchase "in the upcoming weeks."
Fiat has been Chrysler's controlling shareholder since it emerged from Chapter 11 bankruptcy in June 2009. The UAW trust also has been a shareholder since Chrysler emerged from bankruptcy.
Under an agreement reached in 2009, Fiat has the right to begin buying some of the UAW Retiree Medical Benefits Trust's shares every six months through June 30, 2016 until it has acquired 40% of the trust's interest.
According to that agreement, the purchase price for the shares is a multiple of Chrysler's earnings before interest, taxes and depreciation for the most recent four quarters, less Chrysler's industrial debt.
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