(Reuters) – Italian carmaker Fiat has brought in a veteran of the 2009 U.S. autos sector bailout in a bid to break the deadlock in talks for it to buy out the minority investor in U.S. automaker Chrysler, a person familiar with the matter said on Friday.
Fiat, which owns 58.5 percent of Chrysler, has appointed Lazard Vice Chairman Ron Bloom to help with the negotiations with VEBA, a healthcare trust fund affiliated with the United Auto Workers (UAW) union that owns the remaining 41.5 percent.
Bloom was instrumental in convincing the UAW to accept a stake in Chrysler as part of the bailout package that saved the automaker in 2009. He is also advising Detroit retirees in the Detroit municipal bankruptcy.
Fiat Chief Executive Sergio Marchionne, who runs Fiat and Chrysler as one company, wants to buy VEBA’s stake in the smallest of Detroit’s so-called Big Three automakers to create the world’s seventh-largest car manufacturer and secure access to cash and technology it needs to compete against rivals. But talks are dragging on, with the two sides no closer to an agreement, Marchionne said last week.
That means VEBA is pushing ahead with its legally-stipulated right to ask Chrysler to sell part of its stake in an initial public offering (IPO), which could delay Fiat’s merger plans.
The IPO filing could take place as soon as the end of this month, or even by the end of this week, Marchionne has said.
JP Morgan has been tapped to lead the Chrysler IPO if the Fiat buyout doesn’t happen, said another person familiar with the situation on Friday.
Fiat and Chrysler declined to comment.