I was surprised to learn that yesterday Fiat completed it’s buyout of Chrysler. I’m not surprised that it happened; Fiat has wanted to complete the buyout so it can use Chrysler’s money to fund it’s own restructuring. I am surprised that the deal went down on New Years Day. Plus, I’m surprised that they got it so cheaply. The total price is $4.35 billion, with about 60% of that coming from Chrysler itself. Fiat only needs to come up with $1.75 billion. The VEBA that currently owns the stock had been insisting on a price over $5 billion. They need the money to fund the retirees’ healthcare plan (since you can’t pay for doctors appointments with shares of stock).
So far, I’m afraid this is shaping up to be a repeat of the Daimler-Chrysler debacle, where Daimler pretty much beat up Chrysler, robbed it, and left it for dead in a roadside ditch. Only this time, the thugs are Italian, not German.