News Column

Fiat Picks up VEBA Chrysler Shares

January 21, 2014

Staff Reports --

Sergio Marchionne, CEO of Fiat and Chrysler Group
Sergio Marchionne, CEO of Fiat and Chrysler Group (file photo)

January 21, 2014, Turin, Italy - Fiat S.p.A. through its wholly owned subsidiary Fiat North America LLC completed its previously announced acquisition of all of the VEBA Trust's membership interests in Chrysler Group LLC on Tuesday. Chrysler Group is now a wholly owned subsidiary of Fiat.

The consideration for the acquisition consisted of a special distribution paid by Chrysler Group today of $1.9 billion, with FNA directing its portion of the special distribution to the VEBA Trust as part of the purchase consideration; and a cash payment by FNA to the VEBA Trust of $1.75 billion, according to a news release.

Fiat funded the latter payment from available cash on hand, and Chrysler Group funded the special distribution from available cash on hand.

At the same time, Chrysler Group and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) entered into a memorandum of understanding under Chrysler Group's existing collective bargaining agreements to provide for additional contributions by Chrysler Group to the VEBA Trust of an aggregate of $700 million in four equal annual installments, the first of which was paid at the closing of the transaction with Fiat, according to the release.

FNA and the VEBA Trust will dismiss with prejudice the proceedings before the Delaware Court of Chancery with respect to the interpretation of the call option agreement.

The UAW Retiree Medical Benefits Trust, a Voluntary Employees' Beneficiary Association, is an independently administered trust established to pay health care benefits for retirees from Chrysler

Source: Fiat S.p.A. media relations

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