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Sergio Marchionne

(Carlos Osorio | Associated Press)

AUBURN HILLS, MI- Fiat SpA announced Wednesday that it will acquire Chrysler Group LLC as part of a $4.35-billion deal.

The Italian automaker, which currently owns 58.5 percent of Chrysler, will purchase the remaining 41.5 percent from the United Auto Workers union trust fund that pays health care bills for retirees.

As part of the agreement -- expected to close on or before Jan. 20 -- Fiat will pay the trust $1.75 billion in cash, and Chrysler will throw in $1.9 billion. The union trust will receive $3.65 billion in cash for the stake. Chrysler also committed to giving the UAW trust another $700 million over three years.

Fiat and Sergio Marchionne, CEO of both of the automakers, have wanted to purchase the union’s shares instead of taking the company public.

"In the life of every major organization and its people, there are defining moments that go down in the history books," Marchionne said in a statement. "For Fiat and Chrysler, the agreement just reached with the VEBA is clearly one of those moments."

The two sides have been arguing on the

The trust set the value of the stock at $4.27 billion, while Fiat said $1.75 billion.

Fiat originally took stake in Chrysler as part of the 2008-2009 automotive bailout, which started under President George Bush and was expanded by President Barack Obama.

Since Fiat originally took a 16-percent stake in Chrysler, the Italian automaker has continued to grow its stake in the now-successful Auburn Hills-based automaker.

"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.

Since 2009, Chrysler has grown its U.S. market share; overhauled its produce portfolio; recorded several consecutive profitable quarters; and 44-consecutive months of year-over-year sales growth; launched the SRT and Fiat brands in the U.S.

Fiat is the third parent company of Chrysler in 15 years. In 1998,

Chrysler was acquired by Daimler. The German-based company than sold Chrysler to

Cerberus Capital Management, an American private equity firm, in 2007.

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Michael Wayland covers the automotive industry for MLive. Email him at MWayland@mlive.com & follow him on Twitter @MikeWayland or Google+