Shares in Italian car giant Fiat soared after it announced it would take full control of Chrysler in a historic $US3.65 billion ($A4.12 billion) deal.
Fiat stock jumped 15.8 per cent at the opening on Thursday to 6.88 euros before slipping back slightly to 6.70 about 9am GMT (8pm AEDT).
The complex deal announced by Fiat on Wednesday paves the way for a full merger that will create a new global auto giant.
Fiat said the long-awaited agreement included a $1.75 billion cash payment for the 41 per cent stake that has been held by the VEBA fund of the US auto worker's union United Automobile Workers since Chrysler's bankruptcy procedure.
Fiat chief executive Sergio Marchionne, also the chief executive of Chrysler, said in a statement from the company's headquarters in Turin, northern Italy, that the transaction would "go down in the history books".
"The unified ownership structure will now allow us to fully execute our vision of creating a global automaker that is truly unique," Marchionne said.
Fiat said it expected the deal to be wrapped up by January 20, completing a process that began in 2009 with the start of Fiat's partnership with Chrysler following the storm of the global economic crisis and the plunge in US car sales.
Fiat originally took a 20 per cent stake in the third largest US automaker as part of the company's bankruptcy.
What was originally seen as a risky bet for Fiat - German automaker Daimler had failed to turn around Chrysler - has paid off handsomely as Chrysler's sales are now booming after decades of turbulence and decline.
Chrysler's profits have been keeping Fiat buoyant in recent years amidst a deep downturn in Europe, and Marchionne has been steadily expanding Fiat's stake in Chrysler.
Italian trade unions on Wednesday hailed the agreement, saying they hoped it meant Fiat would now start investing more in Italy - a key bone of contention that has made Marchionne a hate figure for many unionists who suspect he is planning to move away from operations in Italy.
Fiat employs 197,000 people, including 80,000 in Italy, making it the biggest private-sector employer.
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