Chrysler IPO will change the relationship with Fiat

Article by Christian A., on September 30, 2013

The relationship between Chrysler and Fiat will change if the U.S. company proceeds with the initial public offering, according to Fiat Chairman John Elkann. Paperwork has been filed by Chrysler, 58.5%-owned by Fiat, for a flotation of shares owned by the United Auto Workers, which owns the rest of Chrysler through its retirees' healthcare trust.

Talks between the trust and Fiat for a buyout had failed, prompting the trust to pursue the listing. Information in the stock market listing document has led to doubts on Fiat’s commitment to its Chrysler alliance. Elkann added that having two separately listed companies is “very different” from having only one.

n its filing, Chrysler said that if there’s a separate listing, Fiat may reconsider its business plan with the U.S. firm. Fiat seeks to acquire the 41.5% remaining stake in Chrysler and hopes to merge the group's finances too. However, the union-affiliated healthcare trust has not accepted Fiat's offer.

There is a gap of at least $1 billion on what these two parties are willing to agree on. If the healthcare trust opts for a public listing, it will get a market evaluation of its worth.

Analysts said that Fiat probably won’t cut its alliance with Chrysler as both groups need each other's products to continue to exist. An insider said that in a separate listing, the two groups will spend more for their sharing of technology and dealer networks. It will also take more time to accomplish their goals. [source: Reuters]

Topics: chrysler, fiat, ipo

If you liked the article, share on:

Comments

Recommended

Imagine a sports car morphing into an SUV. Chevrolet initially revealed the FNR Concept at the previous Shanghai Auto Show in 2015. For this year, Chevy once again graces the...
by - April 22, 2017
From the moment FCA kicked off with its 3-month-long ad campaign until the day it unveiled the new Dodge Challenger SRT Demon, folks have been guessing what the exact figures...
by - April 22, 2017
Some people may think Audi Sport is a new company but it is in fact the motorsport division of Audi combined with the best of what Quattro GmbH can offer....
by - April 21, 2017
It is not a big secret that premium customers in China have a strong penchant for luxury cars with a spacious interior. In particular, premium customers in China purchase luxury...
by - April 21, 2017
Chinese automaker Chery did not leave a good impression last time they were in Australia - due to its cheap design. But this year, Chery showcases its new Tiggo Sport...
by - April 21, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries