DETROIT (AP) — Italian automaker Fiat is considering aplan to hold a public stock offering
after the company buys 100 percentof Chrysler, according to a person briefed on the matter.The planto
sell shares of a combined company is among several options beingevaluated by Sergio Marchionne, who
serves as CEO of both automakers,said the person, who requested anonymity because no decision has
beenmade.A stock offering would raise much-needed money for researchon new vehicles at both companies,
and could help Fiat weather theeconomic downturn in Europe.Fiat now owns 58.5 percent ofChrysler, and
wants to buy the remaining 41.5 percent from a health caretrust fund for union retirees. The two sides
differ on price, and thatmay be decided by a U.S. court.Fiat and Marchionne were appointedto manage
Chrysler in 2009 by the U.S. government, which had bailed outthe struggling company and funded its trip
through bankruptcyrestructuring. Since then, Fiat has raised its stake in a resurgentChrysler, and
Marchionne wants to merge the companies to generate morecost savings from joint research, management and
purchasing.FiatSpA shares are now traded publicly on the Milan stock exchange, whileChrysler is
technically a private company with no publicly tradedshares. Presumably, Fiat shareholders would be
offered a stake in thenew company if they approve the merger.No decision has been madeon where to list
shares of the new company, the person said. ButMarchionne has repeatedly told reporters that U.S. stock
markets aremore profitable than those in Italy.Merging the companies wouldgive Fiat access to Chrysler’s
cash holdings. Currently, Fiat shares inChrysler’s profits but can’t use the Detroit automaker’s funds
for itsown operations. Without Chrysler, Fiat would have lost $1.41 billionlast year. Chrysler had $11.6
billion in cash at the end of 2012. BothChrysler and Fiat are scheduled to report first-quarter earnings
onMonday.Marchionne has said Fiat has 10 billion euros ($13billion) in cash that can be used to cope
with a severe slowdown inEuropean auto sales and buy the trust fund’s stake in Chrysler.LikeFiat, the
trust got its stake in Chrysler from the government. At thetime that Chrysler filed for Chapter 11, it
owed the trust around $4billion as part of a deal with the United Auto Workers to take overretiree
health care costs.The trust fund needs cash to paymedical bills for thousands of Chrysler blue-collar
retirees. In orderto monetize its stake in Chrysler, it either has to sell the shares toanother party,
such as Fiat, or sell shares of Chrysler to the public —which could happen if Fiat and the trust can’t
agree on a share price.Thetrust has asked Fiat to begin working on an IPO of Chrysler, but
cannotformally compel it to follow through; a public offering takes about 18months to prepare.
Marchionne has said he favors buying the trust’sstake to selling separate shares of Chrysler to the
public.Amerger between Fiat Industrial and CNH, or Case New Holland, a U.S. farmequipment maker, could
be an indication of how Fiat and Chrysler mightmerge. Fiat Industrial and CNH are to merge into a new
company laterthis year. The new entity has yet to be named, but it will be based inthe Netherlands with
its main stock listing in New York and a secondaryone in Europe.Marchionne has already taken steps to
combine Fiatand Chrysler. The companies are sharing engines and parts and havejointly designed cars like
the Dodge Dart compact. The balance sheetsare already combined, although there is a strict separation of
assets.Copyright 2013 The Associated Press.