Chrysler and Fiat CEO Sergio Marchionne said Thursday that he would prefer to merge the two brands without issuing a stock sale to the public, the Detroit Free Press reported.
Since January, the Free Press reported, Chrysler has been preparing to register its stock for a potential initial public offering because of pressure from the United Auto Workers Retiree Medical Benefits Trust. The UAW trust is the world's largest voluntary employee beneficiary association and wields considerable influence, with a 41.5 percent ownership in Chrysler.
Italy-based Fiat owns the majority, with a 58.5 percent stake in the company, the Free Press reported.
Marchionne said the possibility of a Chrysler IPO is about "fifty-fifty," the article stated, and that it would take until at least autumn before a decision is made.
However, Marchionne said his preference is "not to do an IPO and to create the merged company," the article said.
Marchionne's desire to keep from selling stock to the public makes sense, as a public offering would require Chrysler to change its corporate structure and other time-consuming processes, the Free Press reported.
Marchionne also said Fiat has enough available cash to fund the acquisition of Chrysler shares and complete a restructuring of its European operations, the report stated. Still, Fiat has met with bankers to explore the possibility of raising additional capital to acquire the remaining shares of Chrysler.
"I think we have received from a variety of sources a commitment to bring the transaction to a close," Marchionne said, according to the Free Press. "But it takes two to tango. You need a willing seller and a willing buyer to get a transaction."
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