TURIN, Italy -

Coming on the heels of Fiat increasing its ownership in Chrysler thanks to another performance achievement, last week the Italian automaker reached another agreement by exercising its incremental equity call option to gain another 16 percent interest in the Big 3 OEM.

Under this agreement, Fiat explained that it will exercise in full its incremental equity call option. The deal is subject to and concurrent with Chrysler’s second-quarter closing of a refinancing transaction in which Chrysler’s U.S. and Canadian government debt is fully repaid.

Upon completion of the transaction, executives said Fiat’s interest in Chrysler will increase by an incremental 16 percent, bringing the company’s level to 46 percent. They indicated the call option will be exercised at an aggregate price of $1.268 billion.

“The transaction that we are announcing represents a historic step for Fiat and Chrysler and is a source of great satisfaction and pride for both,” stated Fiat chairman John Elkann.

“Fiat, together with Chrysler, will create a stronger automobile group, with a full range of products, present in every market around the world and able to compete with the best,” Elkann continued.

“Over the past couple of years, Fiat and Chrysler have worked side by side with commitment and mutual respect,” he went on to say. “With the contribution of everyone who works with us and with the full support of myself and my family, from today, this spirit of collaboration will become even stronger, as we continue to produce appealing, fun, safe and eco-friendly automobiles.”

What chief executive officer Sergio Marchionne predicted would happen “in a matter of days” came to fruition on April 12. That’s when Chrysler announced Fiat’s ownership interest in the company had increased from 25 percent to 30 percent.

Chrysler explained that increase came as the result of the company’s achievement of the second of three performance-related milestones outlined in a recent amendment to its June 10, 2009, operating agreement. Officials said that pact broadened the Chrysler-Fiat partnership and enhances Chrysler’s international market position

Executives recounted the second milestone required Chrysler to achieve cumulative revenues of more than $1.5 billion attributable to company sales made outside of Canada, Mexico and the United States — what they called NAFTA countries — after June 10, 2009.

Marchionne described Fiat’s most recent interest gain as “a fundamental step toward completion of the momentous integration of Fiat and Chrysler, initiated less than two years ago, that will result in the creation of a global automaker.

“We have chosen to accelerate the pace to bring about, in the shortest possible time, the birth of a single group capable of fully leveraging the joint development of the respective international activities,” Marchionne continued.

“Chrysler is undergoing an extraordinary industrial and financial turnaround and Fiat is ready to take control, in order to bring even greater stability and strength to the relationship in the interests of both,” he added.

Fiat and Chrysler believe the transaction announced last week, together with the expected achievement of a further 5-percent interest gain before year’s end, will enable the companies to bring to fruition the vision upon which the alliance was founded.

Marchionne depicts it as, “The creation of an efficient and competitive global automaker, possessing advanced technologies and the determination to establish itself as a leader in the sector.

“In so doing, we will be able to guarantee our employees a more certain future and challenging environment, where cultural exchange and integration, together with a competitive spirit, will provide the ideal conditions for their professional and personal growth,” he declared.

Analyst Reaction to Fiat Interest Gain

At least one industry observer thinks Fiat’s plans are coming together better than initially predicted.

“This decision shows Fiat is striving to get to that 51 percent ownership quicker than expected. I think Fiat is keen on getting that majority ownership of Chrysler, which will allow them to make more precise decisions and have better control of the fate of the company,” Jesse Toprak, vice president of industry trends and insights at TrueCar.com, shared with Auto Remarketing.

“Fiat is obviously looking to get multiple models into the U.S. market,” Toprak continued. “Chrysler can use these vehicles to get away from being so reliant on SUVs and trucks and get a better footing with small cars. With gas prices as they are and not going down any time soon, more quality small cars is critical for any company for its survival.”

Marchionne Receives Honor from TIME

In other news, Chrysler also revealed last week that Marchionne was tapped by TIME to be a part of the 2011 TIME 100, the magazine’s annual list of the 100 most influential people in the world.

Chrysler mentioned the list — now in its eighth year — is meant to recognize the activism, innovation and achievement of the world’s most influential individuals.

As TIME managing editor Richard Stengel has said of the list in the past, “The TIME 100 is not a list of the most powerful people in the world, it’s not a list of the smartest people in the world, it’s a list of the most influential people in the world. They’re scientists, they’re thinkers, they’re philosophers, they’re leaders, they’re icons, they’re artists, they’re visionaries. People who are using their ideas, their visions, their actions to transform the world and have an effect on a multitude of people.”

Marchionne was named CEO of Chrysler in June 2009. This past January, he was appointed chairman of Fiat Industrial S.p.A, resulting from the demerger with Fiat S.p.A, and maintains his role as chief executive officer of Fiat S.p.A.

Previously, Marchionne was appointed chairman of Case New Holland in April 2006 and CEO of Fiat Group Automobiles in February 2005. He was tapped as  CEO of Fiat S.p.A. in June 2004 and has been a member of the board since May 2003.

The full list of selections and related tributes appear in the May 2 issue of TIME, which became available last Friday and also is online at time.com/tk.