Chrysler buyout coming? Fiat purchase of auto maker in neutral after IPO rumblings

Fiat CEO Sergio Marchionne said efforts to merge the Italian automaker with Chrysler Group LLC may have stalled out as a retiree healthcare trust that owns a minority stake pushes for an initial public offering of the carmaker.

The United Auto Workers may try to sell part of its 41.5 percent holding by the first quarter through an IPO.

Marchionne, who runs both automakers, said that Fiat may then buy the trust's holding at market price.

“The dialog is going on; we are not getting closer but we keep on talking,” Marchionne said. An eventual share sale at Chrysler “may delay” the merger.

Chrysler will file IPO documents by the end of the month to list a 16.6 percent stake, which the trust can legally do. Chrysler Group LLC would be able to purchase at that rate, but will have a longer process to complete the merger should the IPO go into effect.

“It gets much trickier for Fiat to buy out Chrysler minorities after an IPO,” said Erich Hauser, an analyst at ISI Group in London. “Marchionne’s plan to merge the two carmakers and get his hands on Chrysler cash may be at risk.”

Marchionne has been trying to unify the companies the past four years to improve both automakers' ability to compete with other makes. He missed the Frankfurt auto show this week because of more pressing matters, but did not disclose which matters those are.