Fiat to buy remaining Chrysler stake

<p>The world’s seventh largest car company will be created through the move.</p>

Fiat has confirmed it has agreed a deal to buy the remaining shares in fellow car manufacturer Chrysler that it does not already own.

The agreement will see the world's seventh largest car company created. Fiat has owned a stake in Chrysler since 2009.

Negotiations with the current owners, Veba, which is the healthcare trust affiliated to the United Auto Workers' union, finally came to a head recently.

Chrysler and Fiat have agreed they will pay the trust an initial $3.65 billion (£2.2 billion), while a further payment of $700 million will be made once the deal has been completed.

Fiat's chief executive Sergio Marchionne is planning to use the buyout of Chrysler as an opportunity to widen the global reach of the company.

Robert Naftaly, chair of the committee that governs the trust, said: "This agreement is in the best interests of the trust's UAW Chrysler retiree members and their families who rely on the trust to provide vital health care benefits."

Following the news, the share price of Fiat saw a strong boost this morning (January 2nd). By 08:34 GMT, stocks in the company were up almost 13 per cent and were still rising.

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