Report: Fiat Revives Talks to Buy Remaining Chrysler Stake

Fiat SpA, which owns 58.5% of Chrysler Group LLC, has resumed talks about buying the remaining 41.5% of the company held by a United Auto Workers union healthcare trust, according to Bloomberg News.

Chrysler-Fiat CEO Sergio Marchionne is eager to merge the two companies. Doing so would give Fiat access to the American company's cash with which to revive operations in Europe.

Bloomberg's sources say Fiat is proposing to pay about $4.2 billion for the trust's holding, based on a valuation of $10 billion for Chrysler made earlier by advisors hired to prepare Chrysler for an initial public offering.

But other advisors calculate Chrysler's value as high as $19 billion, according to a Bloomberg source. If so, the trust's holding would be worth $7.9 billion. Fiat is legally permitted to buy the stake for a maximum of about $6 billion, regardless of Chrysler's valuation.

Fiat and the UAW have been stalled for months over valuation. A court case to settle the matter won't begin for another nine months. The trust forced Chrysler last October to file for an IPO, which would establish a price, but most analysts believe the two sides will settle on a price for a direct buyout.