NEW YORK ( TheStreet) -- Italy's Fiat SpA on Wednesday, Jan. 2, kicked off the new year with a long-awaited, $4.35 billion agreement to end a dispute with labor representatives at Chrysler Group LLC and buy the outstanding shares from a union-affiliated healthcare trust.
Fiat, of Turin, Italy, said it would pay $3.65 billion for the 41.5% stake it doesn't already own. The price includes $1.75 billion from its own coffers as well as $1.9 billion from Chrysler itself.
Fiat will also pay a healthcare trust affiliated to the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, or UAW, union an additional $700 million to support Fiat CEO Sergio Marchionne's efforts to integrate Chrysler and drop lawsuits related to Fiat's attempts to buy the outstanding holding.
The agreement ignited Fiat's shares on their first day of 2014 trading. The stock was up 12.2%, or 0.725, at 6.675 ($9.16) by late morning in Milan.
"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique in terms of mix of experience, perspective and know-how, a solid and open organization that will ensure all employees a challenging and rewarding environment," Marchionne said in a statement.
Fiat began its foray into Detroit by buying 20% of Chrysler as it emerged from bankruptcy in 2009. It gained control in 2011 and then began a lengthy process to buy the outstanding holding from the UAW's Voluntary Employee Beneficiary Association, known as Veba. Those efforts included call options on a 3.3% stake held by Veba. The call options led to a series of lawsuits that have been settled in the New Year's deal.