The Italian carmaker Fiat said on Wednesday that it had reached an agreement to take full ownership of Chrysler, the smallest of the three American automakers, in a $4.35 billion deal with the United Automobile Workers retiree health care fund. The deal to buy out the trust’s 41 percent stake, expected to close on Jan. 20, would make Fiat the world’s seventh-largest automaker, Jaclyn Trop reports in The New York Times.
The agreement allows Chrysler and the union to end months of negotiations over the value of the U.A.W.’s stake. Union leadership had been trying to force an initial public offering to cash out its shares amid arbitration in a Delaware court over the value of the trust’s stake. Fiat has held a majority stake in Chrysler since the automaker emerged from bankruptcy in 2009, and it has made no secret about its ambition to acquire the remaining stake.
Under the terms of the deal, Fiat is paying the trust $1.75 billion in cash, and Chrysler is making a $1.9 billion contribution. Chrysler also agreed to pay the trust $700 million in four annual installments once the deal closes. Ms. Trop writes: “The agreement to pay $1.75 billion to the U.A.W. means that Fiat will have paid a total $3.7 billion to acquire Chrysler, much less than the $36 billion Daimler-Benz paid for the company in 1998 or the $7.4 billion Cerberus Capital Management paid to acquire an 80 percent stake in 2007.â€
MERGER ACTIVITY PICKED UP IN 2013  | The animal spirits appear to be finally returning to the corporate world in the United States, DealBook’s David Gelles reports. While global deal-making was basically flat for a fourth consecutive year, annual volume in the United States rose 11 percent in 2013 compared with the previous year, according to Thomson Reuters. Companies announced more than $1 trillion worth of deals during the year, the most since the financial crisis, with the United States accounting for 43 percent of all deals worldwide.
“There’s a feeling of a more stable backdrop that executives think will be with us for the foreseeable quarters,†said Blair W. Effron, co-founder of Centerview Partners, an independent investment bank. “I didn’t have a sense of that at the end of 2012 or 2011.â€
And with markets buoyant, bankers and lawyers that advise companies on mergers and acquisitions say they are more optimistic than they have been in years. “From a macroeconomic perspective, we have a stronger economy, we have Congress behaving more responsibly, and we have all appearances of stability at the Fed,†said Scott A. Barshay, head of the corporate department at Cravath, Swaine & Moore, one of the top law firms on Wall Street. “C.E.O.’s can look forward and say, ‘I don’t see any near-term economic bumps.’â€
ON THE AGENDA Â |Â The I.S.M. manufacturing index for December is released at 10 a.m. Gene Sperling, director of the National Economic Council, is on CNBC at 8:10 a.m.
A STOCK EXCHANGE EXPANDS ITS GLOBAL REACH  | In the future, the face of the global stock market may well be a squat suburban office building in Lenexa, Kan., outside Kansas City, where BATS Global Markets is based, Nathaniel Popper writes in DealBook. “While the New York Stock Exchange has recently been swallowed up by the InterContinental Exchange, a company that gets most of its revenue from trading derivatives, BATS, which was founded in 2005, has been doubling down on plain-vanilla stock trading and global expansion. That steady business has quietly moved it closer to the top of the list of the largest stock exchange operators in the world in terms of the value of shares traded.â€
“In the coming months, BATS is set to complete its merger with another upstart company, Direct Edge, in a deal that will turn it into what will most likely be the biggest stock exchange company in the United States (at least on some trading days). In Europe, BATS is already the largest exchange after a rapid, and mostly overlooked, ascent that now has it hosting trading in nearly all the big economies on the Continent. As it continues to push in those existing markets, it is looking to take on other parts of the globe, including Canada and Japan.
“Everywhere it goes, BATS is aiming to serve as an evangelist for the American way of trading, focusing on low costs, competition and high-speed trading.â€
Owner of British Broadcaster Is Said to Explore a Sale  | Richard Desmond, the owner of the British TV broadcaster Channel 5, “has asked advisers to work on a possible sale†that could raise more than 700 million pounds, or about $1.2 billion, The Financial Times reports. FINANCIAL TIMES
Chinese Businessman Seeks to Invest in Times Co. Â |Â Shares in The New York Times Company rose after Chen Guangbiao, a wealthy Chinese businessman and philanthropist known for his zany public stunts, said this week that he was leading a group of investors seeking to acquire a large or controlling stake in the company. NEW YORK TIMES
Chinese Company Bids for Fisker Automotive  | Reuters reports: “China’s largest auto parts company made a surprise bid for Fisker Automotive just days before the bankrupt maker of the Karma plug-in hybrid sports car was to be sold to a Hong Kong tycoon, according to court documents.†REUTERS
How Newspapers Fare Under Berkshire Hathaway  | Dozens of small newspapers are discovering the benefits of being owned by Warren E. Buffett’s company, The Wall Street Journal reports. WALL STREET JOURNAL
A Bruising Year for Bond Investors  | The Financial Times writes: “Bond investors are braced for a new year shock, with annual statements likely to show 2013 was the worst year for bond returns in well over a decade.†FINANCIAL TIMES
Buyers Return for Luxury Cars  | “Luxury is not a dirty word anymore,†Robert Ross, an automotive consultant with Robb Report, a lifestyle magazine for wealthy readers, told Jaclyn Trop of The New York Times. “In 2008, luxury was a dirty word.†NEW YORK TIMES
For Stocks, an Amazingly Good Year  | Despite turbulence in Washington, China and Europe, which threatened to pull the world into another recession, stock prices just kept rising in 2013. DEALBOOK
Global Optimism for 2014, With an Eye to Risks  | The swiftness of the rebounds in equity markets in Japan and some European countries has created a palpable nervousness among investors, The New York Times writes. NEW YORK TIMES
Home Prices Rise, but the Ascent Could Slow  | The last glimpse at the housing market for 2013 showed that home prices in major metro areas kept rising in October, with the year-over-year gain at 13.6 percent, The New York Times reports. NEW YORK TIMES
Private Equity Reaps Big Gains  | “Private equity firms are set to return a record amount of cash to their investors for 2013, after taking advantage of buoyant markets to sell hundreds of billions of dollars of investments,†The Wall Street Journal reports. WALL STREET JOURNAL
Private Equity Players Look Beyond the Buyout  | Big buyout firms in the United States “are looking at deals such as minority investments in companies or partnerships with companies looking to make an acquisition â€" types of transactions that they largely shunned before the financial crisis of 2008,†Reuters writes. REUTERS
Cohen Cuts Price on N.Y. Apartment, to $98 Million  | The hedge fund billionaire and trader Steven A. Cohen originally put the four-bedroom, five-and-a-half bathroom duplex up for sale in the spring. Its pricetag then: $115 million. DealBook »
Third Point Is Said to Buy Stake in Hertz  | Third Point, the hedge fund run by Daniel S. Loeb, has taken a stake of less than 5 percent in the rental car company Hertz, CNBC reports, citing unidentified people familiar with the situation. CNBC
Stock Sales to Resume in China  | Bloomberg News reports: “China’s securities regulator approved the initial public offerings of five companies seeking to raise about $353 million, paving the way for share sales to resume after a freeze of more than one year.†BLOOMBERG NEWS
New Venture for AllThingsD Journalists  | ReCode, the new venture of Walter S. Mossberg and Kara Swisher, founders of the conference and news business All Things Digital, has backing from two minority investors, Windsor Media, an investment firm run by the former Yahoo chief executive Terry S. Semel, and NBCUniversal News Group, The New York Times reports. NEW YORK TIMES
Loan Monitor Accused of Ruthless Tactics on Student Debt  | The Educational Credit Management Corporation, the main private entity hired by the Department of Education to fight student debtors who file for bankruptcy on federal loans, faces concerns that its tactics have grown ruthless, The New York Times reports. NEW YORK TIMES
De Blasio, Taking Office, Vows Action on Inequality  | In his inaugural address, Mayor Bill de Blasio described social inequality as a “quiet crisis†on par with other urban cataclysms, The New York Times reports. NEW YORK TIMES
Kazakh Bank Accuses Former Chairman of Fraud  | Mukhtar Ablyazov, the former chairman of Kazakhstan’s state-owned BTA Bank, is being held in a crowded prison south of Aix-en-Provence in France, as lawyers and judges debate his fate, The Wall Street Journal reports. WALL STREET JOURNAL
