European auto giant Fiat officially took over Chrysler, after it reached an agreement with the U.S government on June 3rd, 2011 to buy the government’s remaining 6% equity stake in Chrysler. This deal raises Fiat’s stake in Chrysler from 46% to 52%.
American automobile maker Chrysler had gone into the red zone, during the economic recession. In 2009, Obama administration had rescued Chrysler from bankruptcy, after it invested $ 12.5 billion in Chrysler under Troubled Asset Relief Program Fund. Around that time, Fiat took a 20% stake in the company, in exchange for sharing its technology and providing management leadership to Chrysler. As the company is now back to making profits, the deal between the U.S government and Fiat is seen as a win-win situation for both.
German auto expert Ferdinand Dudenhöffer, Economics professor at the University of Duisburg-Essen is confident this deal is beneficial for Fiat because “Fiat got Chrysler cheaply, and the US market is slowly improving.” Auto experts believe the deal paves way for Fiat’s entry into the U.S market, where it has been missing in action for a while now.
Chrysler after emerging from bankruptcy has refurbished its product offerings and has reported profits in its sales for the month of May, 2011.
