Shares in Fiat have soared after it announced it would take full control of Chrysler, with excitement for the historic deal's potential largely allaying concerns of its cost.
Fiat stock jumped 15.8 per cent at the opening on Thursday to 6.88 euros before slipping back slightly to 6.84 at around 1430 GMT (0130 AEDT on Friday).
The complex $US3.65 billion ($A4.12 billion) deal announced on Wednesday paves the way for a full merger that will create a new global auto giant expected to be the seventh biggest in the world.
Fiat said the long-awaited agreement with its US partner included a $US1.75 billion cash payment for the 41 per cent stake held by a fund controlled by the US union UAW ever since Chrysler's bankruptcy procedure.
Fiat chief executive Sergio Marchionne, who is also the CEO of Chrysler, said in a statement 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 in the wake of the global economic crisis and the plunge in US car sales.
"The costs and financing... of this deal are more favourable to Fiat than the market expected, and the deal successfully secures Fiat's operational and financial future," Max Warburton, a senior analyst at Bernstein Research, told Dow Jones Newswires.
Fiat originally took a 20 per cent stake in the third largest US carmaker as part of the company's bankruptcy in 2009.
What was originally seen as a risky bet for Fiat - the German carmaker 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.
Marchionne's ambitious goal is to create a new global player in the car industry with the capital and volume to compete with the likes of Toyota and General Motors.
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