Things have not gone exactly as planned for Sergio Marchionne.
As the head of both Chrysler and Fiat, he's been planning for some time to merge the two companies. Fiat already owns a 58.5 percent stake in Chrysler, and Marchionne had hoped to buy the remaining 41.5 percent that's held by VEBA, a healthcare trust affiliated with the United Auto Workers union.
Unfortunately, the undisclosed offer that Marchionne made for that slice of Chrysler's pie didn't sit well with VEBA management, so VEBA refused. And so, according to Reuters, Marchionne is going with Plan B.
Plan B involves taking Chrysler public without Fiat owning VEBA stock. Marchionne says that he plans to file paperwork for the initial public offering sometime this week.
An IPO gives VEBA some advantages. For starters, selling Chrysler shares in the open market gives VEBA the chance to land a higher price. Also, the threat of VEBA's shares being purchased by an investor who might be hostile to Fiat is some encouragement for Marchionne to sweeten his offer to VEBA before trading begins.
Then again, VEBA doesn't hold all the cards. It can only sell 25 percent of its holdings in Chrysler on the stock market, which works out to be just over 10 percent of the total. The remaining 75 percent of VEBA's shares must be sold to Fiat.
In other words, Marchionne and Fiat will eventually own the lion's share of Chrysler. The questions are: (a) how much will Fiat pay for that privilege, and (b) will it have full ownership, or just 90 percent?