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Fiat to Buy Chrysler for Pennies on the Dollar

Just as the ā??inkā? was drying on the previous story, an update arrived saying that Italian automaker Fiat has agreed to take full ownership of Chrysler Daimler AG.

Fiat to Buy Chrysler for Pennies on the Dollar (NYTimes)

Just as the ā??inkā? was drying on the previous story, an update arrived saying that Italian automaker Fiat has agreed to take full ownership of Chrysler Daimler AG. To acquire total control, Fiat will finalize a $4.35 billion deal with the United Automobile Workers (U.A.W.) retiree health care fund to acquire the trustā??s remaining 41 percent stake in the business. Once the deal closes on Jan. 20, 2014, Fiat would become the worldā??s seventh-largest automaker, according to Jaclyn Trop of the New York Times. This deal will end months of political wrangling between the company and the U.A.W. about the value of its stake in the smallest of the Big Three automakers in America.Ā  The specific terms of the deal stipulate that Fiat pay a total of $3.7 billion for the same company that Daimler-Benz paid $36 billion to buy in 1998. Thatā??s not a bad deal if you can get an automaker for about 10 cents on the dollar. As for shareholders in Daimler (DAI), youā??ll just have to wait and see how this all shakes out.

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Written By

Paul Dykewicz is the editorial director of the Financial Publications Group at Eagle Publishing Inc., www.eaglepub.com, of Washington, D.C. Eagle publishes five free, e-letters, 10 weekly trading services and five monthly investment newsletters, Forecasts & Strategies, Successful Investing, Cash Machine, Growth & Dividend Report and The Alpha Investor Letter. He also is the editor of Eagle Daily Investor and the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain."

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