Italian automaker Fiat may increase its 20% stake in Chrysler to over 50% before the American manufacturer returns to the stock market.
Fiat will receive an extra 15% when Chrysler builds a small engine and meets its North American sales objectives. In addition, Fiat has an option to increase its holdings by 16% when Chrysler repays its Canadian and U.S. government loans.
If you add it all up, Fiat’s stake in Chrysler may rise to 51% before the American manufacturer’s initial public offering. According to financial analyst Philippe Houchois, this would be a “positive scenario for Fiat shares,” as the Italian automaker could save between 1 and 2.7 billion dollars.
Sergio Marchionne, CEO of Fiat and Chrysler said that such an investment would be “advantageous if it happens”. He also stated that the scenario was unlikely and that “a legal merger is not going to change our lives,” repeating that a Chrysler initial public offering could happen in the second half of 2011.
Fiat had inherited its Chrysler shares as part of the bankruptcy reorganization of the American auto giant in 2009.
Source: Bloomberg
Fiat will receive an extra 15% when Chrysler builds a small engine and meets its North American sales objectives. In addition, Fiat has an option to increase its holdings by 16% when Chrysler repays its Canadian and U.S. government loans.
If you add it all up, Fiat’s stake in Chrysler may rise to 51% before the American manufacturer’s initial public offering. According to financial analyst Philippe Houchois, this would be a “positive scenario for Fiat shares,” as the Italian automaker could save between 1 and 2.7 billion dollars.
Sergio Marchionne, CEO of Fiat and Chrysler said that such an investment would be “advantageous if it happens”. He also stated that the scenario was unlikely and that “a legal merger is not going to change our lives,” repeating that a Chrysler initial public offering could happen in the second half of 2011.
Fiat had inherited its Chrysler shares as part of the bankruptcy reorganization of the American auto giant in 2009.
Source: Bloomberg