(Adds detail on results, merger concerns, updates share price)
By Bernie Woodall
DETROIT Aug 6 Amid concerns that Fiat
shareholders will prevent a merger of the Italian automaker with
Chrysler Group, the American automaker reported that
second-quarter profit was up 22 percent to $619 million.
Fiat shares fell as much as 8.5 percent on Wednesday to
their lowest of the year on concerns that investors who voted
against the merger with Chrysler would exercise their right to
sell the stock, potentially jeopardizing the tie-up.
Sergio Marchionne, chief executive officer of both Fiat and
Chrysler, will speak to industry analysts on a conference call
to begin at 11 a.m. EDT (1500 GMT) on Wednesday.
Marchionne wants to incorporate the two carmakers as a
Dutch-registered combine, Fiat Chrysler Automobiles (FCA),
paving the way for a U.S. listing which it hopes will help fund
an ambitious turnaround plan.
But the merger is still subject to some conditions,
including a limit on the number of dissenting shareholders who
exercise their right to sell out.
A research note from Barclays said that in its view it would
"be quite tough to reach the threshold" of shareholders to
prevent the merger.
Chrysler posted a rise of 14 percent in net revenue to $20.5
Chrysler also confirmed its full-year outlook given
previously that includes adjusted net income between $2.3
billion and $2.5 billion on net revenue of about $80 billion.
When Fiat issued its second-quarter results last week,
Marchionne said it would review its practices for leasing and
sales in North America in order to boost margins. In the year's
first half, Marchionne said, launch costs impaired Chrysler's
and Fiat's margins. There are no major launches in the second
half of the year for Chrysler.
Fiat executives have indicated that European auto sales were
gradually improving, which was confirmed on Wednesday when LMC
Automotive said sales in Western Europe rose 5 percent in July.
Fiat shares were down 5 percent at 6.51 euros.
(Additional reporting by Agnieszka Flak in Milan and Ben
Klayman in Detroit; Editing by Grant McCool)