Fiat to boost stake in Chrysler Group to 61.8 percent image

Italian automaker Fiat SpA plans to increase its stake in Chrysler Group LLC to 61.8 percent from 58.5 percent, Automotive News reported Friday.

Fiat would exercise an option to buy a small number of shares in Chrysler from the United Auto Workers retiree healthcare trust early next week, people familiar with the matter said.

The transaction would reduce the Chrysler stake held by the Michigan-based trust, also known as the voluntary employee benefit association or VEBA, to 38.2 percent from 41.5 percent. The trust fund provides health care for retired union workers.

A Chrysler spokeswoman had no comment on when Fiat would exercise its option. Under bankruptcy rules, Fiat can exercise its call option starting July 1.

Fiat first set its sights on Chrysler in 2008, when the US group was heading towards bankruptcy and the Italian group was looking for a partner to make its own operation viable by sharing platforms and building economies of scale. Fiat and Chrysler each produce about 2m cars a year.

Marchionne plans to eventually merge Fiat and Chrysler in a bid to increase sales to more than 100 billion euros by 2014 and reduce the Italian manufacturer’s reliance on Europe.
But he said today there won’t be “any spectacular news” on a full acquisition of Chrysler in the second half of 2012.