We’re pretty sure you’ve heard enough about Fiat’s attempts to gain full control of Chrysler, since this endeavor is taking longer than expected and is delaying the merger between the two carmakers.
The latest news is that Fiat CEO Sergio Marchionne has restarted negotiations with a United Auto Workers (UAW) medical trust to buy the remaining shares of Chrysler Group LLC.
According to a Bloomberg News report quoting three people familiar with the matter, Fiat executives met last week with representatives of VEBA (The Voluntary Employees’ Beneficiary Association), the retiree health-care trust. The meeting came after the trust earlier this month rejected a higher offer for it 41.5 percent stake in Chrysler – the first proposal made by Fiat since August.
According to analysts, Marchionne wants to avoid an IPO as it may prove costlier for Fiat to buy the remaining Chrysler shares on the stock market than by purchasing it directly from VEBA. The IPO was delayed for 2014 because of tax reasons.
IPO advisers evaluated Chrysler to be worth around $10 billion (€7.3 billion), with Fiat seeking to pay about $4.2 billion (€3 billion) for VEBA’s 41.5 percent stake. However, the trust asks for at least $5 billion. The gap is nevertheless narrower than the previous one of more than $1 billion.
Fiat now holds 58.5 percent of Chrysler after rescuing the company from bankruptcy in 2009.
By Dan Mihalascu
PHOTO GALLERY
