US to sell Chrysler stake to Fiat

The US Treasury has agreed to sell its stake in Chrysler Group to Italian manufacturer Fiat.

Once the $500 million (£306 million) deal is completed, the US government will no longer have any ties with the car maker.

Fiat, which took over the management of Chrysler after it went bankrupt two years ago, will own a majority stake following the agreement.

An official announcement on the decision is expected to be made during President Obama's trip to Chrysler's plant in Toledo, Ohio.

Under the deal, Fiat will also acquire an option on Chrysler's shares, which are currently held by a trust for retired auto industry workers, for $75 million (£45 million).

This amount will be shared between the US Treasury Department, which will receive 80% or $60 million (£36 million), and the Canadian government, which will get the remaining $15 million (£9 million)

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