Fiat Might Raise Chrysler Stake Above 50% (CS, CNH)

Fiat Chief Executive, Sergio Marchionne, said Monday he does not plan to merge operations with Chrysler Group LLC, but noted the Italian firm could lift its 20% stake in the U.S. automaker to over 50% in 2011 if Chrysler returns to the stock market. “I think it is possible, don't know whether it is likely, but it is possible that we go over the 50% if Chrysler decides to go to the market in 2011,” Marchionne said on the sidelines of an event in Milan to celebrate the first trading day of Fiat's industrial division. Marchionne took over the wheel at Chrysler in addition to his job at Fiat after the U.S. automaker's government orchestrated bailout. Marchionne reiterated previous remarks that Chrysler's initial public offering may take place in the second half of next year. Marchionne, 58, has been integrating business operations between the two carmakers for the last 18 months. He said Chrysler business development was healthy in December. “In 2011, we will have to deliver what we told the markets in November 2009,” he said. Credit Suisse CS analysts, however, questioned Marchionne's remarks on the possible Chrysler stake increase this year.” Credit Suisse said in a note to clients, “We remain skeptical about his ability to address the contractual hurdles.” On January 1, Fiat divided itself into two companies to allow its car and truck businesses to pursue separate development strategies. Fiat Industrial SpA controls the trucks and tractors units Iveco and CNH Global N.V. CNH, while Fiat SpA owns the passenger car operations. “It's a very important moment for Fiat, because it represents at the same time a point of arrival and departure,” Marchionne said. Marchionne said the current trading prices of Fiat Industrial “were not fair.” He added that investors and media should wait until the end of the first trading day to comment further. Observers believe Marchionne will be able to focus more on potential alliances in coming quarters. When asked about possible acquisitions in coming months, Marchionne said the company doesn't need to raise capital if opportunities arise. He added that Fiat has no plans to divest assets. Fiat Industrial is going to hold its first board meeting within the first three months of the year, Marchionne said. He added that he hasn't thought yet about a replacement as board member for former Italian Economy Minister Tommaso Padoa-Schioppa, who died in December.