(January 3, 2011) MILAN — Tommaso Ebhardt reporting for Bloomberg says Fiat SpA, the Italian carmaker that owns 20 percent of Chrysler Group LLC, may boost the holding to more than 50 percent before the U.S. automaker’s initial public offering, according to the two companies’ CEO.

“I think it is possible. I don’t know whether it is likely, but it is possible that we’ll go over the 50 percent mark if Chrysler decides to go to the markets in 2011,” Sergio Marchionne, 58, told reporters at the Milan stock exchange. “It will be advantageous if that happens.”

Fiat received the stake as part of Auburn Hills, Michigan- based Chrysler’s 2009 bankruptcy reorganization. It expects to get an additional 15 percent this year when Chrysler makes a small engine in the U.S. and meets sales objectives outside of North America.

Fiat has an option to increase the holding to 51 percent, buying an additional 16 percent, after Chrysler repays U.S. and Canadian government loans.

“It looks cheaper for Fiat to get 51 percent of Chrysler before the IPO,” said Philippe Houchois, a London-based analyst at UBS AG, who estimates that Fiat could save $1 billion to $2.7 billion if it exercises the option before a Chrysler listing. “It’s a positive scenario for Fiat shares.”

Marchionne said that there is currently no plan to merge Fiat and Chrysler. “A legal merger is not going to change our lives,” he said. He reiterated that a Chrysler IPO could take place in the second half of this year.

Fiat will go ahead with a plan to reorganize its Mirafiori plant in Turin if the majority of its workers approve the deal signed with unions, the CEO said.

Italy’s largest manufacturer won backing from all but one labor union for a 1 billion-euro plan to revamp Mirafiori in exchange for labor concessions Dec. 23.

Source: Bloomberg