Ford Motor Company on Thursday paid $2,418.5 million to acquire Fiat Chrysler Automobiles for $5.7 billion.
Ford Chief Financial Officer Jim McNerney said the deal will result in $1.7 trillion in value for the U.S. and an increase in Ford’s total U..
S.-bound vehicle sales to 1.1 million vehicles annually from 717,000 this year.
The deal includes a $5 billion credit line and $1 billion in cash to help finance the deal.
Ford will use the $1 million credit line to pay down debt and pay off its remaining $2 billion in outstanding convertible bonds.
The company is still expected to use about $500 million in convertible bonds for the purchase price.
Ford CEO Mark Fields said the purchase will create an unparalleled opportunity for Ford to accelerate its global strategy of making cars that are better for the environment and people.
“This acquisition is about making a better car for the world, and the automotive sector is the fastest-growing segment of the U, and Ford will leverage its position in a number of key sectors, including automotive manufacturing, electric vehicles, and renewable energy, to drive that strategy,” Fields said.
Ford has been working with Fiat Chrysler on its new Transporter SUV.
Fields said he expected that the vehicle would be delivered in 2020, and that the company would likely use the purchase for “major product introductions.”
The transaction is expected to close in the fourth quarter of 2021.
Ford said it expects the deal to close by the end of 2020, with the purchase valued at about $2 trillion.