Chrysler and Fiat CEO Sergio Marchionne said today he would prefer to fully merge the two automakers without issuing stock for sale to the public.
"My preference is to create one single company," Marchionne said today at an event in Kokomo, Ind. "I've been working on this for four years. I just want to bring it home."
Since January, Chrysler has been preparing to register its stock for a potential initial public offering because the UAW Retiree Medical Benefits Trust asked Chrysler to begin making those preparations.
For that reason, Marchionne said the possibility of a Chrysler public stock offering is about "fifty-fifty," and said it will take at least until this fall before a decision is made.
Still, Marchionne said he preference is "not to do an IPO and to create the merged company."
A public offering would require Chrysler to change its corporate structure, to conduct a road show with investors and a number of other time consuming processes.
Turin, Italy-based Fiat owns 58.5 percent of Chrysler while the UAW Retiree Medical Benefits Trust owns 41.5%.
Fiat and the UAW trust are entwined in a lawsuit in Delaware Chancery court of the value of 6.6% of Chrysler's shares that the Italian automaker would like to purchase. The UAW has refused to sell the shares because it says Fiat's offer is too low.
Marchionne also reiterated today that Fiat has enough available cash to fund the acquisition of Chrysler shares and complete a restructuring of its European operations.
Still, Marchionne acknowledged today that Fiat has met with bankers and lending institutions to explore the possibility of raising additional capital to acquire the remaining shares.
"I think we have received from a variety of sources a commitment to bring the transaction to a close," Marchionne said. "But it takes two to tango. You need a willing seller and a willing buyer to get a transaction."
Hispanic #1 Breaking News for Entrepreneurs, Professionals and Small Business Owners - HispanicBusiness.com
OCTOBER 31, 2014
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