What could possibly be more important for Fiat CEO Sergio Marchionne this week than the Frankfurt Motor Show? We’re only asking this question because the Fiat-Chrysler Group has announced that its CEO won’t attend the show because of “work commitments”. Fiat chairman John Elkann won’t be in Frankfurt either. So what is really happening at Fiat?
While we agree that the Fiat and Chrysler Group’s lineup at the show isn’t very exciting (no new products, just light makeovers and special edition models), Marchionne’s absence is rather curious and has fueled speculation that the Italian carmaker may be nearing a deal to acquire the rest of its U.S. unit Chrysler.
At least that’s what the stock market suggests, as Fiat shares rose over 5 percent on Monday following the announcement about Marchionne’s absence from Frankfurt. A source quoted by Reuters said the CEO was staying in Italy, but did not offer any other details.
Fiat wants to buy the Chrysler shares owned by U.S. healthcare trust VEBA in order to merge the two automakers. The United Auto Workers healthcare trust became Chrysler’s second-largest shareholder with 41.5 percent when the automaker emerged from bankruptcy in 2009 and the union swapped future healthcare payments for a stake. VEBA manages the healthcare benefits on behalf of the union.
Fiat and VEBA have so far disagreed over the correct price for the minority stake, with Marchionne reportedly seeking to settle the dispute out of court to avoid a legal battle that could take years.
By Dan Mihalascu
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