Marchionne hopes IPO process would show Chrysler’s value image

According to the Fiat and Chrysler CEO, the New York Stock exchange share sales should give a clear valuation of the U.S. carmaker’s value, even as he tries to seal a deal for total buyout of the group.

Fiat, which currently owns 58.5% of Chrysler, was not able to fall in agreement over the sale price with the United Auto Workers union, which owns the rest of Chrysler LLC via its retirees’ healthcare trust fund. Because of that, the American company last week filed the papers for a flotation of the union shares through an IPO – initial public offering. Though the move could complicate Fiat-Chrysler ties, Sergio Marchionne saw a use from it.

“One of the things I hope is that it will become very clear exactly what the markets think Chrysler is worth, which is the only real reference point,” Marchionne said to journalists. “There’s a pretty clear process that leads to the IPO, and it places clear road markers that can be recognized by both sides.”

The Chrysler sale negotiations are being closely monitored by debt and equity investors, as Fiat’s long-term plan to cut losses in Europe hinges on its ability to easily and cheaply share technology, cash and dealer networks with Chrysler. Fiat’s ongoing discussions to acquire the remaining stake in Chrysler are still going on, but have not made any progress, Marchionne added.

Via Reuters