Fiat, which currently owns 20% of Chrysler, may boost their holding to more than 50% before a planned initial public offering by the U.S. car manufacturer this year.
“I think it is possible, don’t know whether it is likely, but it is possible that we go over the 50 percent if Chrysler decides to go to the market in 2011,” Sergio Marchionne, CEO of both automakers, told reporters at the Milan stock exchange today. “There will be an advantage if that happens.”
Fiat obtained a 20% stake as part of Chrysler’s bankruptcy reorganization in 2009. It can get 15% more when Chrysler makes a small engine in the U.S., meets sales objectives outside of North America and sells a domestically made car in the U.S. that gets 40 mpg (5.9 litres per 100km).
Marchionne said last month that he is considering repaying U.S. and Canadian government loans before 2013, which could allow Fiat to exercise an option to increase its ownership by 16 percent.
Marchionne did say that there are currently no plans to merge Fiat and Chrysler.
“A legal merger is not going to change our life,” he said, reiterating that a Chrysler IPO may take place in the second half of this year.
Source: Bloomberg
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