Fiat hits two-year high after €3.2bn deal for full Chrysler control

Fiat’s €3.18bn deal to gain full control of Chrysler Group sent its shares to a near two-and-a-half-year high yesterday, despite doubts over whether the Italian carmaker could use the merger to cut losses in Europe.

Investors welcomed the deal struck by chief executive Sergio Marchionne, under which Fiat will buy the 41.46% of the third biggest US carmaker it does not already own, without raising funds from the stock market.

Marchionne, who has run both companies since Chrysler’s 2009 US government-funded bankruptcy restructuring, intends to merge the two into the world’s seventh-largest auto group.