Firm Advises Fiat in Completion of Acquisition of Chrysler Equity from U.S. Treasury and Canada

July 22, 2011

Deal closing gives Fiat S.p.A. majority control of Chrysler’s privately held shares and marks the end of the U.S. government’s and the Canadian government’s ownership stakes in the U.S. automaker.

On July 21, it was announced that the United States Department of the Treasury has completed the sale of its stake in Chrysler Group LLC to Willkie client Fiat S.p.A. Pursuant to the deal announced last month, Treasury sold its remaining 6 percent interest in Chrysler to a Fiat subsidiary for $500 million. On July 21, it was also announced that the Canadian government sold its 1.5 percent interest in Chrysler to a Fiat subsidiary for $125 million.

In addition, Fiat paid $60 million to the U.S. government and $15 million to the Canadian government for all rights under the 2009 Equity Recapture Agreement entered into between a union-managed healthcare trust and the United States Department of the Treasury.

The closings of the two deals mark the end of the U.S. government’s and the Canadian government’s ownership stakes in Chrysler.

Willkie also advised Fiat in its $1.27 billion acquisition of an additional 16 percent stake in Chrysler, which raised its ownership in the U.S. automaker from 30 to 46 percent on a fully diluted basis. (Fiat acquired its initial stake in Chrysler upon Chrysler’s emergence from bankruptcy in 2009.) That deal closed in May in connection with the refinancing and repayment by Chrysler of $7.6 billion in outstanding government loans, six years ahead of schedule. Fiat now holds a 53.5 percent fully diluted equity interest in Chrysler, which is expected to grow to 58.5 percent later this year.

The Willkie team advising Fiat included partners Robert Stebbins and Richard Reinhold and associates Michael Brandt and Delano Ladd.