Fiat ponders taking a majority interest in Chrysler
Sergio Marchionne, who heads up both Fiat SpA and Chrysler Group LLC, told reporters in Italy that Fiat is considering acquiring up to a 51-percent stake in Chrysler should the latter go forward with its anticipated public stock offering during the second half of 2011. Marchionne made the statement at the Milan stock exchange, where he was on hand to mark a different kind of historic Fiat event. In April 2010, the Italian organization announced that it would split its car-making and truck/bus-making operations into two distinct entities. His appearance coincided with the first day of share trading for the newly-minted Fiat Industrial SpA stock.
Fiat, which currently owns 20 percent of Chrysler Group LLC that it acquired as part of the deal that allowed the American automaker to emerge from bankruptcy, is already in a position to up that amount by an additional 15 percent at some point in 2011 when it begins producing a new, super-efficient 1.4-liter engine here in the U.S. and manages to comply with several other stipulations, including repaying outstanding Chrysler loans to the American and Canadian governments. Beyond that, Fiat will be permitted to buy up to 16 percent more shares in Chrysler, which would up its total holding to 51 percent. While Marchionne provided no definitive commitment to becoming the majority owner -- and Chrysler has yet to set a date for any kind of IPO -- he did note: "It will be advantageous if that happens."