By Soyoung Kim and Olivia Oran
NEW YORK Nov 20 Chrysler Group LLC has added
four banks to help underwrite its proposed initial public
offering, as the U.S. automaker looks to launch the deal as soon
as early December, according to people familiar with the matter.
Barclays Plc, Goldman Sachs Group, Morgan
Stanley and UBS AG have been appointed as
bookrunners in the offering, which is being led by JPMorgan
Chase & Co and Bank of America Merrill Lynch,
the people said on Wednesday.
The IPO could price in December, the people said, declining
to be identified because the information is private.
Chrysler declined to comment. Representatives for the banks
either declined to comment or did not respond to requests for
Chrysler, which is majority owned by Italian automaker Fiat
SpA, filed paperwork for an IPO in late September after
Fiat was unable to reach a buyout deal with Chrysler's
second-largest shareholder, a retiree healthcare trust
affiliated with the United Auto Workers union.
While the IPO could happen within weeks, analysts have said
that the healthcare trust and Fiat will come to terms on a
buyout before the first shares are sold.
Sergio Marchionne, chief executive of both Fiat and
Chrysler, has said he wants to merge the two companies to create
the world's seventh-largest carmaker.
Chrysler has come a long way from being nearly dead in 2009
when Marchionne, along with the U.S. Treasury and the UAW,
agreed to a restructuring deal that left Fiat with 20 percent
Chrysler is now a profit center for Fiat, which has been
hurt by the sagging sales for automobiles in Europe while
Chrysler's home North American market has seen sales rise nearly
50 percent since 2009.
Fiat's ownership has grown to 58.5 percent and the
UAW-affiliated health care trust for retired Chrysler workers
owns 41.5 percent.
The VEBA healthcare trust and Fiat so far have remained far
apart on valuing the No. 3 U.S. automaker. Some analysts have
said the company is worth around $10 billion.
Analysts have said that Fiat and the VEBA will come to terms
ahead of the IPO, even just hours before the launch of the
offering, because by then a market value for Chrysler will be
In October, Marchionne said he hoped the IPO process would
give a clear sense of Chrysler's worth.
"One of the things I hope is that it will become very clear
exactly what the markets think Chrysler is worth, which is the
only real reference point," Marchionne said on Oct. 3 in Italy.
"There's a pretty clear process that leads to the IPO, and
it places clear road markers that can be recognized by both
sides," he said.
UAW trusts for retired auto workers were set up in 2007 at
Chrysler, as well as at General Motors Co and Ford Motor
Co as a way for the financially struggling U.S. automakers
to offload their obligation to pay retiree healthcare benefits.
The trust was initially supposed to be funded with cash. But
as part of the 2009 financial crisis, the union agreed to take
stakes in GM and Chrysler in lieu of cash.