Fiat spurns Europe, eyeing the rest of Chrysler and a US listing

Fiat spurns Europe, eyeing the rest of Chrysler and a US listing
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Fiat, struggling in Europe, wants to double down on the United States, buying the part of Chrysler that it doesn’t already own, several news outlets are reporting today.

The full merger of Fiat and Chrysler would create the world’s seventh-largest auto group, setting the stage for a listing on the New York Stock Exchange and more direct competition with General Motors and Volkswagen.

Last year, Fiat lost more than €700 million ($908 million) in Europe, amid the ongoing euro crisis, and made 75% of its operating profit in North America. Acquiring the rest of Chrysler would help refill the group’s balance sheet, and an American IPO would open up new sources of funding.

Fiat acquired a majority stake in Chrysler in 2009 as part of the carmaker’s government-managed bankruptcy. Back then, it was hard to believe the Auburn Hills, Mich.-based car company would have a revival, but Chrysler fully repaid its government loans in 2011.

The remaining 41.5% of Chrysler that Fiat doesn’t own is controlled by VEBA, the United Auto Workers retiree health-care fund, which claims its stake is worth more than Fiat is willing to offer. They are battling over the value in a Delaware court.