Italian automobiles maker Fiat SpA (BIT:F) is expected to arrange funding for its planned acquisition of the 41.5% stake it does not already own in US peer Chrysler Group LLC by May, two sources told Reuters.

According to one of the informed people, Fiat wants to raise some EUR3bn (USD3.9bn) in new financing and is currently holding advanced talks with lenders. The insider added that the Italian company wishes to ink a deal with the current owner of the remaining shares, VEBA, by early July.

At present, the two shareholders are in a dispute over the valuation of VEBA’s minority stake. A US court hearing on Thursday is expected to help clear things up, although no final ruling is expected in the next few months, Reuters said.

VEBA, which is linked to a United Auto Workers union, is keen on seeing its Chrysler interest listed, while Fiat’s CEO Sergio Marchionne prefers that his company would buy the stake. The executive plans to merge the two companies to form the seventh biggest carmaker in the world.

Based on analysts’ calculations, VEBA’s 41.5% shareholding is valued at between USD3.5bn (EUR2.7bn) and USD4bn, the news agency added.

US private equity firm Carlyle Group LP (NASDAQ:CG) said it had made a substantial investment in UK minicab company Addison Lee Plc, without disclosing the terms of the deal.

Reuters cited an insider as saying that Carlyle took a significant majority stake in the UK firm in exchange for an investment worth some £300m ($457m/€351m).

With this move, financed with capital from the €5.4bn ($7.1bn) fund Carlyle Europe Partners III LP, the private equity firm aims to help Addison Lee’s growth in the UK and internationally, it said. As part of the expansion strategy, Addison Lee will innovate its proprietary technology platforms and brand experience, while increasing access to its extensive fleet for customers, Carlyle explained.

Active since 1975, the UK firm has built a fleet of more than 4,500 vehicles, carrying over 10m passengers and couriering one million deliveries annually.

Deloitte LLP, OC&C and Latham & Watkins LLP acted as advisors to Carlyle. Addison Lee’s advisors were Catalyst Corporate Finance and Joelson Wilson.

German carmaker Daimler AG (FRA:DAI) on Wednesday said it had raised gross proceeds of around EUR2.2bn (USD2.9bn) from the sale of its remaining 7.5% in European aerospace and defence group EADS NV (EPA:EAD) to institutional investors.

Daimler, which started the placement on Tuesday, said it had disposed of 61.1m EADS shares at EUR37.00 apiece, with strong demand from investors.

The sale is seen to boost Damiler’s free cash flow this year and help its stable dividend policy, it said today. It also plans to use the cash to back the global growth of its divisions and the extension of its technological leadership, Daimler said in its previous statement.

EADS participated in the placement run by Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS) with an investment of EUR600m in the repurchase of 16m own shares.

US vehicle rental group Avis Budget Group Inc (NASDAQ:CAR) announced it had wrapped up its $500m (€384m) takeover of car sharing network Zipcar Inc (NASDAQ:ZIP).

The completion of the transaction comes following its approval by Zipcar’s stockholders and the UK Office of Fair Trading earlier this month. It was also cleared under the US Hart-Scott-Rodino act in February.

A month earlier, Avis Budget said it had agreed to buy the network for $12.25 per share, which is a 49% premium over Zipcar’s closing price on 31 December 2012. It had also noted it would use debt and cash resources to finance the deal.

The company expects this acquisition to help it boost its growth potential in the US and internationally, while also generating annual synergies of up to $70m.

The Bank of England said today that its Monetary Policy Committee (MPC) has voted to maintain interest rates at 0.5% and also resisted calls to inject more money into the economy to help stimulate recovery.

Rates have now been held at their record low level for four years.

At the February meeting of the rate-setting committee, Bank of England governor Sir Mervyn King and two others voted to increase the quantitative easing (QE) programme by GBP25bn to GBP400bn but they were outvoted. Some economists were expecting the bank to expand QE at the MPC’s March meeting.

This morning’s announcement was supported by the British Chambers of Commerce (BCC), whose chief economist, David Kern, expressed disappointment that the pressure for further bond-buying is mounting. “We believe this would be misguided, as more QE would provide only marginal benefits for the real economy, while heightening risks of financial distortions, bubbles and higher inflation,” he added.

Business group the CBI agreed that the prospect of further QE remains. Its director of economics, Stephen Gifford, said that the decision this month is likely to have been a close call.

With the UK economy shrinking again in the final quarter of 2012, all eyes are on the economic data emerging in the first quarter for signs of growth or contraction.

A new survey released today by EEF, the manufacturers’ organisation, and business advisers BDO shows that conditions in the manufacturing industry remain around a three-year low but the outlook is brighter. There are signs that manufacturers could see conditions turn around in the second quarter, with output and order balances expected to recover back to levels seen in the early part of last year.

Also today the BCC published its latest forecast for the UK economy, downgrading its prediction for growth in 2013 to 0.6% from the earlier expectation of 1.0% growth. Similarly, the organisation now expects the economy to grow by 1.7% in 2014, a reduction from the earlier figure of 1.8%.

Commenting on its revised outlook, the BCC said that UK businesses are resilient and have the ambition needed to drive the national recovery forward, but reduced global growth prospects, particularly in the eurozone, together with the ongoing need to repair Britain’s public finances, mean that the pace of the UK recovery will be restricted over the next couple of years.

Sales of new cars in the UK last month remained strong, in contrast to sales in the rest of Europe.

A report released today by the Society of Motor Manufacturers and Traders (SMMT) shows that UK new car registrations in February 2013 totalled 66,749, an increase of 7.9% on the same month last year.

New car registrations have risen every month for the last year, said Mike Baunton, interim chief executive of the SMMT.

Baunton pointed out that February is traditionally a low-volume month ahead of the plate-change in March, but the market was sustained by attractive new car deals.

February’s increase was on a par with the average growth over the last three months and was above the 6.4% average growth recorded in the last 12 months.

Sales last month were mainly driven by private purchases. Petrol and alternatively-fuelled cars proved most popular, with registrations rising by more than a fifth year-on-year. The Ford Focus was the best selling model in February, followed by the Ford Fiesta and the Vauxhall Corsa.

For the first two months of the year, registrations grew 10.3% to a total of 210,392 units.

Sales trends are heading in the opposite direction in Europe, where demand for new cars has been falling amid economic turmoil in the eurozone. European vehicle sales fell by 8.2% in 2012, according to the BBC.

The president of Renault and Nissan, Carlos Ghosn, told Sky News on Tuesday that dwindling demand in Europe is a major concern to global carmakers, with the market remaining depressed and overcapacity contributing to the problem.

The UK has had its own economic difficulties, experiencing a double-dip recession last year and another contraction in the economy in the final quarter of 2012. The SMMT believes that the continued growth in new car sales in the UK is likely to be the result of market specific factors, with customers enticed to replace older vehicles as a result of attractive deals and offers on new, more efficient cars.

France’s government could participate in a capital hike at PSA Peugeot Citroen SA (EPA:UG) if needed, in an effort to help the carmaker limit its increasing losses, daily Liberation cited on Friday an unnamed government source as saying.

A state move to take a stake in Peugeot would be made only as a last resort plan, in case Peugeot could find no other way of dealing with the losses, the source told the paper, without giving any details.

The carmaker on Thursday cut the book value of its plants and other assets by 28%, adding EUR4.13bn (USD5.5bn) to its net loss for 2012.

The government said in October 2012 it was willing to provide state loan guarantees in the amount of EUR7bn to Peugeot’s financial unit Banque PSA Finance.

Peugeot did not wish to comment when contacted by Reuters.

Swedish truck maker AB Volvo (STO:VOLV-B) said it would pay CNY5.6bn (USD900m/EUR669m) for 45% in a new venture with Chinese peer Dongfeng Motor Group Company Ltd (HKG:0489), or DFG, in a move that would convert Volvo into the largest global heavy-duty trucks maker.

The venture called Dongfeng Commercial Vehicles (DFCV) will comprise most of DFG’s medium- and heavy-duty commercial vehicles operations, the buyer said. The deal, part of a strategic alliance between the two groups, will enhance Volvo and DFG’s positions, while ensuring great opportunities for both of them.

Volvo will contribute technological expertise and global presence, providing a significant potential to DFCV to expand and make profits outside China.
In turn, the Swedish group will become co-owner of China’s largest heavy-duty and medium-duty truck manufacturer, securing economies scales in terms of sourcing, development and production for its truck business, it said.

Completion is anticipated to take place in 12 months, pending clearance from Chinese regulators, among other conditions.

On a pro-forma basis, DFCV had net revenues of some CNY39bn and an operating profit of around CNY1.2bn, from the sale of about 142,000 heavy-duty trucks and 49,000 medium-duty trucks in 2011. It has some 28,000 employees.

Chinese sovereign wealth fund China Investment Corporation (CIC) is pondering the acquisition of an interest in German premium motor vehicles manufacturer Daimler AG (ETR:DAI), Chinese media reported.

The online platform of China’s The People’s Daily newspaper, The People’s Daily Online, has reported that the sovereign fund is poised to buy a minority stake of between 4% and 10% in Daimler.

Reuters said on Monday it could not reach Daimler immediately for comment on the matter.

Daimler is based in Stuttgart, Germany. The group is composed of five divisions namely Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services.

Italian carmaker Fiat SpA (BIT:F) said it intends to exercise an option to buy an additional 3.3% stake in Chrysler Group LLC from the Voluntary Employee Beneficiary Association (VEBA) for USD198m (EUR152.1m).

The planned purchase is part of a call option agreement from June 2009, which allows Fiat to buy 16.4% of Chrysler in tranches of up to 3.3% from 1 July 2012 until 30 June 2016.

Back in July 2012, the Italian firm, which currently holds 58.5% of Chrysler, announced plans to buy another 3.3% in the target for USD139.7m. Last September it launched a suit at a Delaware court against VEBA after the employee trust fund said that the proposed price was too low. A ruling is expected in the next several months, Fiat said.

VEBA bought its 41.5% stake in Chrysler in 2009 as part of the vehicles maker’s bailout.

If successful, the purchases of both 3.3% stakes would result in Fiat holding 65.17% of Chrysler.