Fiat Chairman John Elkann has said an IPO involving the Chrysler retirees’ healthcare trust (VEBA) Chrysler stake would have implications for the relationship and alliance between Fiat and Chrysler.
Fiat has said that plans to merge Fiat and Chrysler could be jeopardised.
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Bloomberg reported that Fiat Chairman John Elkann has said this week that there would be two companies if the IPO takes place, adding “that’s different than having a single one.”
“There is no doubt that a listing would alter Fiat’s relationship with Chrysler,” he said, according to Bloomberg.
Some observers wonder if VEBA starting the process to exercise its IPO rights will help to bring about the conditions for the two companies to fully merge. The sticking point has been the valuation of the trust’s 41.5% Chrysler stake. The two sides appear to be far apart, with an arcane argument over a formula for valuation being thrashed out in US courts.
Fiat may end up paying US$4.9bn to buy the holding and end the dispute with the trust because Fiat has an option to purchase part of the stake at a lower price, according to UBS, Bloomberg reported.
See also: US: Chrysler files papers for IPO
