Fiat chairman: Chrysler IPO puts alliance at risk

Elkann: "Having two companies is very different than having one."

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MILAN, Italy (Bloomberg) -- Fiat S.p.A.'s relationship with Chrysler Group will change if a health-care trust succeeds in selling a minority stake in the U.S. carmaker in an initial public offering.

"If Chrysler goes ahead with the IPO, there is no doubt" that it alters the situation with Fiat, John Elkann, the company's chairman, said today in Milan when asked by Bloomberg News if the listing would put the alliance at risk. "Having two companies is very different than having one."

Fiat is reconsidering the benefits and costs of further expanding its relationship with Chrysler in light of plans to sell shares to the public, Chrysler said in the filing for the IPO earlier this week.

Sergio Marchionne, who runs both automakers, is looking to the IPO process to kick-start a merger effort that was stalled by a dispute over Chrysler's value.

Calling the future of Fiat-Chrysler relations into question is a warning to the UAW retiree trust, which owns the 41.5 percent of Chrysler not held by Fiat.

Marchionne is offering at least $1 billion less than what the trust wants for the stake and is banking on investors being hesitant to pay a premium in an IPO opposed by Fiat.

The trust received the holding as part of Chrysler's government-backed bankruptcy in 2009.

Although Fiat already has the right to buy the stake for around $6 billion, Marchionne has said that he's seeking to pay much less.

Marchionne, 61, has spent the past four years working to unify the companies and create a global player with the scale to compete with Toyota Motor Corp., General Motors and Volkswagen AG.

Buying the trust's stake would give Fiat access to Chrysler's $12 billion in cash to help fund a turnaround in Europe, where Fiat is losing money and market share.

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