Fiat CEO finalising details of Chrysler deal

Senior sources at the Italian group said the two companies were hopeful of securing an agreement early this week. If they do not, Chrysler is expected to file for protection from its creditors under Chapter 11 of the US bankruptcy law, the first step towards liquidation. The sources said,however, that Chapter 11 could feature as part of the Fiat agreement.

The deal under discussion will see Fiat take a 20% stake in Chrysler. It will pay nothing for the holding, but give the American group small car designs and other technology . Marchionne, who has turned Fiat round in past two years, is expected to become CEO, replacing Bob Nardelli , the former Home Depot boss who took over when private-equity group Cerberus bought Chrysler two years ago.The Obama administration will underwrite the rescue . If it is satisfied with the terms of Fiat-Chrysler alliance, it will provide the group with $6 billion in soft loans.