Fiat determined to buy remaining Chrysler shares image

Fiat SpA is committed to acquire the remaining 41.5 percent of Chrysler Group shares that it does not own, Fiat-Chrysler CEO said on Friday.

Sergio Marchionne warned that negotiations over the share price could continue for a while, as Fiat is in arbitration proceedings with a UAW union trust fund that owns the shares. The trust fund, which pays medical benefits to retired workers, acquired the shares during Chrysler’s 2009 bankruptcy and bailout. That same year, Fiat gained an ownership stake and took over management of the U.S. automaker.

“We’ve always taken the position that we would have to pay them, but the question is price,” Sergio Marchionne was quoted as saying by Reuters. The CEO added the current arbitration proceedings are „part of the dance”.

However, if the two sides cannot agree on a price before the end of the year, the trust fund can begin the process that would lead to an initial public offering of its shares. Even in this scenario, Fiat and the trust fund may have time to reach a settlement, as the IPO process would take months to meet regulatory and other requirements.

UBS estimates the fair value of Chrysler at between $9 billion and $13.4 billion, meaning the 41.5 percent stake is worth somewhere between $4.1 billion and $5.5 billion.