Fiat-Chrysler Merger far from fruition according to CEO
According to Fiat SpA CEO Sergio Marchionne said that the companies are no closer to formalizing a settlement with a United Auto Workers retiree health-care trust about Chrysler Group LLC. The negotiations with the health care trust are ongoing and should continue, according to Marchionne who is the concurrent CEO of Chrysler.
Marchionne said, "We are still having chats but I don't have a deal." He added that the IPO process would set a 'clear' value of the shareholding, as an agreement is far from being reached.
Chrysler had filed its IPO application last Sept.23 at the suggestion of the retiree health-care trust fund. The company is preparing for the stock sale and this would certainly help resolve the dispute on pricing the trust's shareholdings. This had blocked the CEO's moves to complete a full takeover the US company. For some quarters, Fiat's IPO of Chrysler may place the manufacturer's relationships at risk.
For the past four years, Marchionne had been working to merge Fiat and Chrysler to create a global auto manufacturer to be able to complete with Toyota Motor Corp, General Motors Co and Volkswagen AG. The bone of contention is Marchionne's offer of USD1 billion less than what the health trust fund is demanding. The parties may have to meet in a Delaware court as late as 2015 in order to seek a resolution to the pricing conflict.