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Sergio Marchionne, CEO of Fiat SpA and Chrysler Group, LLC, today told reporters in Milan that the Italian automaker may exercise its options to acquire a 51% majority of Chrysler prior to an initial public offering.
Quoted by Bloomberg News, Marchionne said, I think it is possible, don’t know whether it is likely, but it is possible that we go over the 50 percent if Chrysler decides to go to the market in 2011. There will be an advantage if that happens.”
Fiat already has a 20% stake in Chrysler and can increase that to 35% by meeting certain government-imposed conditions. Those conditions include making a small gasoline engine in the U.S., which is already happening, selling a domestically-produced car that gets 40 miles per gallon and meets sales targets in foreign markets.
Marchionne is considering simply repaying the debts to the U.S. and Canadian governments ahead of time, clearing the way for Fiat to exercise an option to purchase an addiitonal 16% of Chrysler, giving it majority ownership. Even with ownership, Marchionne says there are no plans to merge Chrysler and Fiat.
