WASHINGTON - Treasury Department officials held out for $500 million for the government's 6 percent stake in Chrysler - $100 million more than what Fiat SpA initially offered to pay.
The Treasury got far more than what Fiat paid for a 16 percentage point boost in its Chrysler stake in April, when it upped its stake from 30 percent to 46 percent for $1.27 billion.
Under that scenario, Chrysler was valued at $5.1 billion. That means the Treasury's stake would have been worth just $309 million.
The talks between Fiat and the Treasury began in earnest on Monday after Fiat notified the government of its intent to exercise its option to buy the government's remaining equity stake. The sides were initially far apart, people briefed on the talks told The Detroit News.
On Thursday, Fiat's latest offer was $475 million and the Treasury was holding firm seeking $500 million. In the end, Fiat agreed to $500 million and the agreement was signed around 8 p.m.
Fiat also agreed to pay $75 million for the Treasury's option to acquire the 45 percent stake in the United Auto Workers health care trust for $5 billion. Under the deal, the Treasury will keep $60 million, and the Canadian governments will get $15 million.
The option was essentially worthless to the Treasury, since it had no plans to exercise it.
The deal now must clear antitrust approval in the United States and Europe and is expected to take 30 to 60 days to close.
Under the deal, the Treasury will have recovered about $11.2 billion of its $12.5 billion bailout - far more than most experts initially forecast.
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