Fiat Seeks New Chrysler Stake

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Italian auto maker Fiat SpA formally asked to buy a second tranche of shares in Chrysler Group LLC held by a United Auto Workers' health-care trust that is the U.S. automaker's second-largest holder after Fiat, the Wall Street Journal reported today. Fiat said the second tranche represents an about 3.3 percent stake in Chrysler, the same amount as the first tranche. Fiat has the right to buy shares from the Voluntary Employee Beneficiary Association every six months; beginning this month, the health care trust has a right to request a public offering of its about 41 percent stake in Chrysler. Fiat valued the second tranche of the VEBA's stake in Chrysler at $198 million—more than the about $140 million that Fiat valued the first tranche. Fiat and the VEBA have gone to court in the U.S. to resolve their dispute over the price of the first tranche. The trust, which pays the health-care costs of retired Chrysler employees, wants about $343 million for the first tranche. The trust, which gained its stake in Chrysler following the Detroit automaker's 2009 bankruptcy, has disputed Fiat's value of the shares. Read more. (Subscription required.)