Fiat SpA to increase its share in Chrysler

Fiat SpA, the Italian auto giant that owns a stake of 20 per cent in the Chrysler Group LLC, may push the stake nearer to 50 or more per cent preceding it before the initial public offering (IPO) is announced by the CEO of the American auto giant.

Sergio Marchionne, said that as per him it seems possible but he is not sure of its take over soon. The company feels that it looks as a possibility that they might purchase 50 or more per cent of shares, if the auto makers Chrysler takes its decision of selling it in 2011. He also stated that the auto company will be in advantage if it happens.

Fiat was given the shares in lieu of Auburn Hills, the Michigan based auto company's bankruptcy in 2009 . The company is speculating to receive 15 per cent of additional stake in the current year as and when the auto mobile maker Chrysler develops the small powertrain in America and also completes its sales targets other than in the North American auto market. Fiat also has the option to raise the stake to 51 per cent by purchasing the added 16 per cent, when Chrysler pays back the Canadian and American government loans.

As per the industry experts, for Fiat, the deal to attain the 51 per cent in Chrysler, if before IPO seems cheaper. As per the experts, Fiat, the Italian craftsmanship can save as much as $1billion to $ 2.7 billion. But it is a long way to go before Chrysler starts listing. The experts believe that it seems a positive time for the Fiat market share.

As per the auto giants there is no merger between them. The Chrysler IPO is expected in the second half of the year as revealed by the CEO, Marchionne. He said that the present moment is vital for the Italian car maker as it showcases the start and the end point. As the auto markets are dealing with huge changes, so the auto companies can not stretch it long for holding the sectors together which does not share a common industrial and economic characteristic.

If looking at the Fiat Industrial market share, the two important assets are CH Global NV and Iveco commenced at 8.89 euro at 12:39 pm. The rest of the assets include automobile manufacturing and Maserati and Ferrari luxury car brands that started the trade at 6.69 euro after it started at 6.90 euros. This shows the two stocks together valued at 15.85 euros or more than 2.7 per cent than the Fiat's closing price on 30th December.

Fiat wishes to purchase the 51 per cent even before Chrysler IPO as it will help from pre-IPO taking over terms. Marchionne also said that the Italian car brand is in no need to sell its assets for financing the acquisition for purchasing the new additional Chrysler stake.

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