Fiat driven by Chrysler speculation
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 28 May 2013
Speculation that Fiat was close to a long-awaited deal to buy the remainder of America's Chysler drove up the Italian car manufacturer's shares yesterday, as traders looked forward to a potential public offering in the US by the combined business.
Fiat already owns most of Chrysler, which came perilously close to ruin and had to resort to government aid before forging an alliance with Fiat in order to survive.
The Italian group has since raised its stake and now Fiat's chief executive Sergio Marchionne is reported to be working on a plan to absorb the 41 per cent share that is current-ly owned by a trust run by an employee union.
Fiat is also said to be planning on selling shares on the public markets to strengthen the balance sheet of the enlarged entity. To that end, the Wall Street Journal said over the weekend that Fiat had approched a group of large banks as it seeks to line up the finances it needs to pull off the deal.
The prospect of a merger that would create one of the world's largest car manufactuerers drove up Fiat's shares by 4.43 per cent or €0.25 to €5.66 last night.
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