Fiat may decide to get listed on the New York stock exchange after the merger with the Chrysler Group. The Milan stock exchange would remain the secondary stock market for Italian group, said people familiar with the matter.
Fiat chief executive officer, Sergio Marchionne, is evaluating the main listing of group’s shares on the New York stock exchange, while the center of revenue and profit of the car manufacturer moves to the United States, sources said. A representative of Fiat declined to comment.
Fiat shares could remain on the Milan Stock Exchange, on a secondary market, said another source.
The final decision has not yet been made, as other options are analyzed, but the movement would be a strong political and symbolic signal for the debt-ridden Italy, which seeks to break the circle of recessions.
Marchionne, who runs both Fiat and Chrysler, wants to merge the two companies, so that the new group would compete with General Motors and Volkswagen.
Fiat will buy the rest of Chrysler stake after it acquired a 58.5 percent in the U.S. company since it obtained control in 2009.
“It makes a lot of sense for Marchionne to list Fiat-Chrysler in the U.S. Refinancing costs are typically lower and aren’t so much subject to the funding costs of sovereign bonds. Also, manufacturers tend to get higher multiples,” said Erich Hauser, an analyst at Credit Suisse in London.
Chrysler has become a money factory for Fiat, which tries to eliminate losses in Europe. Last year, Fiat had losses of €700 million from its European operations. In 2012, Fiat has generated 75% of operating profit in North America.
“Italy and Turin should understand that the old Fiat, as we knew it, doesn’t exist anymore. The carmaker now has the U.S. as its biggest market, so I would be surprised if Marchionne doesn’t choose the New York Stock Exchange,” said Giuseppe Berta, a specialist in the history of Fiat and professor of economics at Bocconi University in Milan.
Marchionne made it clear that the U.S. listing is an option to improve access to investors.
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