Just days after buying the U.S. Treasury’s six-percent stake in Chrysler, Fiat-Chrysler CEO Sergio Marchionne announced intentions to buy the Canadian government’s 1.7-percent share. According to Automotive News, Marchionne offered the Canadian government $125 million for its stake in Chrysler.
Just like the U.S. Treasury, the Canadian government owns a share of Chrysler as part of the 2009 bailout after Chrysler declared bankruptcy. Last week’s payment for over $500 million to the U.S. Treasury allowed Fiat to increase its holdings in Chrysler from 46 to 52 percent and gave the Italian auto giant the option to acquire the remainder of the U.S. company. Buying Canada’s stake in Chrysler would increase Fiat’s ownership of Chrysler by another 1.7 percent, to almost 54 percent.
The only remaining shareholder would be the United Auto Workers union. The group’s retirement health trust, VEBA, controls 45.7 percent of Chrysler shares, according to Automotive News. Marchionne told reporters that if Fiat could buy that stake in Chrysler, it may not need to issue an initial public offering of shares for the new Chrysler.
However, the Detroit News reports that Marchionne is keen on having Chrysler become a publicly traded company again. He has stated that Chrysler needs to have a full year of strong financials before pursuing an IPO, which would mean that it would come no earlier than some time in 2012, instead of this year as it had been rumored. Chrysler reported a strong first-quarter net profit of $116 million.
“We'd have a third automaker out of Detroit in the capital markets. Ford and GM are there. It would be good if Chrysler was there, too,” Marchionne told the Detroit News.