Fiat, Chrysler ties are 'irreversible': Marchionne
Fiat will have full ownership of Chrysler "as soon as I can afford it" because the ties between the two automakers are now "irreversible," Sergio Marchionne, who heads both companies, said Wednesday.
"I don't see the future of Fiat and Chrysler as being separate," Marchionne said in a conference call. "I see them as one entity."
Italian auto giant Fiat took control of Chrysler in 2009 as the third largest US automaker emerged from a government-financed restructuring under bankruptcy protection.
After winning a 20 percent stake in exchange for sharing its technology and leadership, Fiat has steadily expanded its control by purchasing shares owned by the US government and the United Auto Workers union VEBA retiree health benefits fund.
"This thing is irreversible," Marchionne said, adding that the connections between both the management structure and product development are "inextricable."
"I just need to get the financial structure to coincide with what we've done from a leadership standpoint and the faster we do it the better I'll feel," Marchionnne said after announcing Chrysler's fourth quarter profits had surged 68 percent to $378 million.
When asked when he envisioned obtaining full ownership, Marchionne said: "As soon as I can afford it."
Fiat has exercised two call options on obtaining shares from VEBA that will ultimately boost its holding to 65 percent from the 58.5 percent it currently holds.
But after Fiat priced a 3.3 percent stake at $198 million, VEBA pressed Chrysler to first undertake a public stock offering with the aim of securing a market-based price.
The IPO would involve 16.6 percent of Chrysler shares held by VEBA, which currently has a 41.5 percent stake in the automaker.
Marchionne has said an IPO could complicate plans to completely fuse the two companies by 2015 and that he instead hopes to purchase shares directly from VEBA.
"Because of VEBA's request now to register the securities, the question as to how and when we do an IPO -- and if we do an IPO -- is on the table," Marchionne said.
Chrysler is required to "make our best effort to complete the IPO on a timely basis after their registration demand," chief financial officer Richard Palmer said.
An IPO will take eight to nine months to complete and Chrysler is currently occupied with closing its books on 2012 and reviewing its business plan, he added.
"There's no change on the timing as compared to what we've already talked about," Palmer said.
© 2013 AFP
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