Chrysler Buyout? Fiat CEO Skips Major Auto Show For 'Unforeseen' Business Meeting

Fiat and Chrysler CEO Sergio Marchionne hasn't had luck acquiring Chrysler. Marchionne said Friday that he is moving ahead with formalities of a public offering for the U.S. automaker, but is no closer to striking a deal than he previously was. He is currently in talks with the United Autoworkers health care trust, VEBA, regarding the its 41.5 percent stake in the company, but both sides have been unable to reach an agreement on pricing. Fiat, an Italian automaker, took a major stake in Chrysler in 2009 after it was bailed out to avoid bankruptcy. It now owns 58.5 percent of the company.

Marchionne said he wishes to buyout the company so he can have a better chance at competing with other motor companies such as Toyota and GM. VEBA obtained the same way Fiat did, with Chrysler paying $75 million for the right to buy all of VEBA's stake for a threshold amount originally set to be capped at $4.25 billion in 2009, but has since been raised to $5 billion. "Veba wants $5 billion? They should buy a lottery ticket," Marchionne told Italian newspaper LaPresse. Despite contestion over funds, Marchionne raised questions when he was unable to attend the Frankfurt car show, a major one for the industry, Friday due to work commitments. "The absence of Marchionne at such an important event makes you think he has something more important to do and this boosts speculation," a trader told Business Insider.

If Fiat buys out Chrysler, it is expected that the company will buy the trust and merege the two manufacturers. This would create the seventh-largest autogroup in terms of annual sales. While it seems likely that Marchionne and VEBA are closer to reaching a deal, the buyout issues could move to court, meaning the CEO would have to wait as late as 2015 for a trial to get rolling. Still, traders predict that the two are closer to an agreement. "The news of Marchionne's absence from Frankfurt has surprised everyone a bit," another trader said. "Now there is hope of some acceleration in the negotiations with VEBA on the Chrysler stake." A source close to Marchionne said that he remained in Italy during his absence from the auto show.