Fiat is expected to increase its stake in Chrysler as early as next week. Though Fiat currently owns 58.5 percent of Chrysler, the company could boost its stake up to 61.9 percent as Fiat and Chrysler chief Sergio Marchionne looks to further connect the two companies, reports The Wall Street Journal.
Fiat’s additional 3.3 percent stake in Chrysler would come from purchasing shares from the Voluntary Employee Benefit Association (VEBA), a UAW trust fund that provides healthcare for retired members. The extra investment, which could cost Fiat $250 million to $300 million, may help the company avoid an initial public offering of Chrysler, something that insiders say would be distracting from Marchionne’s ultimate goal of melding Fiat and Chrysler’s operations into one.
Fiat can increase its ownership in Chrysler as early as July 1, and will be allowed to purchase up to 16.6 percent more (for a total stake of 75.1 percent) of Chrysler from VEBA between July 1 of this year, and June 30, 2016.
Source: The Wall Street Journal (Subscription required)