Chrysler Group today announced that it has filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering of common shares. The U.S. carmaker said the number of shares and the price range for the offering have not yet been determined.
“The common shares to be sold in this offering are proposed to be sold by the UAW Retiree Medical Benefits Trust (the ‘VEBA Trust’), which has exercised demand registration rights under a shareholders’ agreement with Chrysler Group LLC. The VEBA Trust will receive all of the net proceeds from this offering,” reads Chrysler’s press release.
The IPO is expected to pave the way for a merger between Chrysler Group and Fiat Group. The initial public offering may help solve a dispute between Fiat and the United Auto Workers union over Chrysler’s value as CEO Sergio Marchionne aims to merge the two companies.
However, Chrysler said in its filing that an IPO might prevent or delay the merger, which may cause Fiat to rethink the benefits of its alliance with Chrysler.
“Fiat has informed us that it is reconsidering the benefits and costs of further expanding its relationship with us and the terms on which Fiat would continue the sharing of technology, vehicle architectures and platforms, distribution networks, production facilities and engineering and management resources,” Chrysler said in its filing.
Some analysts say the IPO is a move by the UAW trust to make Fiat come up with a better offer and that the IPO will never take place. The initial public offering could be canceled if Fiat and VEBA reach a deal.
By Dan Mihalascu
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