Ital­ian car­mak­er Fi­at said Fri­day it in­tends to buy the US gov­ern­ment's full stake in Chrysler with­in ten busi­ness days, giv­ing it ma­jor­i­ty own­er­ship of Chrysler. The pur­chase would end the US gov­ern­ment's in­volve­ment in Chrysler a lit­tle more than two years af­ter the car­mak­er emerged from bank­rupt­cy. It al­so would re­turn Chrysler to for­eign con­trol four years af­ter the dis­so­lu­tion of its merg­er with Daim­ler of Ger­many. "This is great news for Chrysler. ... It ob­vi­ous­ly gives us more au­ton­o­my to move for­ward," said Al­fred Flo­res, a Chrysler deal­er in Hous­ton and head of the com­pa­ny's na­tion­al deal­er coun­cil.

Fi­at and the US Trea­sury will ne­go­ti­ate a price. If they don't reach an agree­ment by June 10, they agreed to ac­cept the av­er­age of two es­ti­mates set by in­vest­ment banks, Fi­at said in a state­ment. Fi­at's an­nounce­ment came a week be­fore Pres­i­dent Barack Oba­ma is to vis­it a Chrysler plant in Tole­do next Fri­day. By buy­ing the gov­ern­ment's re­main­ing shares, Fi­at would boost its Chrysler stake to 52 per cent, up from 46 per cent. Fi­at and Chrysler need each oth­er and this deal will strength­en the al­liance, said long-time au­to an­a­lyst Maryann Keller. "Nei­ther one has the abil­i­ty to com­pete alone in the kind of glob­al en­vi­ron­ment that they face," Keller said.

Ear­li­er this week, Chrysler re­paid all of its gov­ern­ment debt, when it made pay­ments of $5.9 bil­lion to the US Trea­sury and $1.7 bil­lion to Cana­da and On­tario. Fi­at's de­ci­sion to pur­chase the US gov­ern­ment's re­main­ing 6 per cent stake in Chrysler just days af­ter it re­paid its gov­ern­ment loans un­der­scores how fast Chrysler CEO Ser­gio Mar­chionne is com­bin­ing the two com­pa­nies, an­a­lysts said Fri­day. By buy­ing the gov­ern­ment's re­main­ing shares, Fi­at would in­crease its stake in Chrysler from 46 per cent to 52 per cent, of­fi­cial­ly giv­ing the Ital­ian au­tomak­er ma­jor­i­ty con­trol for the first time. The deal is ex­pect­ed to close by June 10. "One thing that was al­ways ob­vi­ous to me was that Fi­at would take over Chrysler at some point, but that has hap­pened much faster than I would have imag­ined," said au­to­mo­tive an­a­lyst Maryann Keller.

Even though Cana­da and the province of On­tario would still own 1.7 per cent of Chrysler, the move would end US gov­ern­ment own­er­ship of Chrysler. The US Trea­sury, by con­trast, still owns 26.5 per cent of Gen­er­al Mo­tors. "This gets them out from un­der­neath any hint of gov­ern­ment own­er­ship and any of that neg­a­tiv­i­ty that went along with the bailout," said Re­bec­ca Lind­land, au­to­mo­tive an­a­lyst with IHS Au­to­mo­tive. Strate­gi­cal­ly, this is a good time for Fi­at to strike a deal with the US Chrysler earned a prof­it of $116 mil­lion in the first three months of the year, its first prof­it since 2006. The val­ue of Chrysler's shares could in­crease if the com­pa­ny's prof­itabil­i­ty im­proves. Mean­while, stock prices for Ford and GM have trad­ed in a stag­nant range late­ly. Ford's shares closed Fri­day at $14.60, down from $18.97 in mid-Jan­u­ary.