UPDATE 1-Chrysler float would mean different relationship with Fiat

Thu Sep 26, 2013 10:57am EDT

MILAN, Sept 26 (Reuters) - A listing of car maker Chrysler would change the relationship with its biggest shareholder Fiat , which has been trying to take full control of the U.S. company, the chairman of the Italian group said on Thursday.

Chrysler, 58.5 percent-owned by Fiat, filed paperwork for a flotation of shares held by the United Auto Workers, which owns the rest of Chrysler through its retirees' healthcare trust.

The trust demanded the listing after talks with Fiat failed to agree on a buyout deal. Information in the stock market listing document has raised questions about Fiat's commitment to its Chrysler alliance.

"If the IPO goes ahead and there are two separately listed companies, it is certainly very different from having just one," Fiat Chairman John Elkann said, replying to a question asking if the alliance with Chrysler were at risk if the float (initial public offering) went through. Elkann was speaking to journalists on the sidelines of a conference in Milan.

If the two car companies end up being separately listed, Fiat could re-consider its business plan with the U.S. automaker, Chrysler said in its filing.

Fiat wants to buy the 41.5 percent stake in Chrysler it does not already own, in order to merge the group's finances as well. But the owner of the stake, the union-affiliated healthcare trust, has not accepted Fiat's offer.

The two sides are thought to be at least $1 billion apart on a price, which has not been made public. By seeking a public listing for part of its stake, the healthcare trust would obtain a market evaluation of its worth.

Fiat is unlikely to walk away from its alliance with Chrysler, analysts have said, since both groups need each other's products to survive.

But the seamless sharing of technology, dealer networks, purchasing and engines would be slower and more expensive if the two groups were separately listed, said a person familiar with the situation.