Fiat CEO Sergio Marchionne Frankfurt Motor Show 2011
Hannelore Foerster/Bloomberg via Getty ImagesFiat CEO Sergio Marchionne at the Frankfurt auto show in 2011.
By Giancarlo Navach, Stefano Rebaudo, Jennifer Clark, Isla Binnie and Agnieszka Flak

Shares in Italian carmaker Fiat rose more than 5 percent Monday after its top management pulled out of the Frankfurt car show, fueling speculation it may be close to a deal, possibly to buy out the rest of its U.S. unit Chrysler.

Fiat said on Friday chief executive Sergio Marchionne wouldn't go to Frankfurt because of "work commitments," without elaborating. Chairman John Elkann has also pulled out of the key industry event, his spokesman said Monday.

"The absence of Marchionne at such an important event makes you think he has something more important to do and this boosts speculation," a trader said. A source familiar with the situation said Marchionne was staying in Italy, but didn't give any other details.

Another Milan-based broker said Marchionne may be involved in negotiations with a U.S. health care trust to reach an agreement on the purchase of the trust's stake in Chrysler. Fiat is expected to buy the trust's 41.5 percent holding in Chrysler and then merge the two manufacturers to create the world's seventh-largest auto group by sales.

The United Auto Workers health care trust became Chrysler's second-largest shareholder when Chrysler emerged from bankruptcy in 2009 and the union swapped future health care payments owed to it for a stake. The health care trust, known as VEBA, manages those health care benefits on behalf of the union.

Fiat and VEBA have been at loggerheads over the price for the minority stake, and Marchionne may be looking to settle the dispute out of court to avoid a lengthy legal battle.

"The news of Marchionne's absence from Frankfurt has surprised everyone a bit," another trader said. "Now there is hope of some acceleration in the negotiations with VEBA on the Chrysler stake."

Should the battle with VEBA proceed to court, Fiat may have to wait until 2015 for a trial, which in turn could take more than a year to complete.

Fiat runs the two automakers as a single company, but wants to buy the rest of Chrysler to squeeze out more synergies, cut borrowing costs and access some of Chrysler's cash flow.

Shares in Fiat were up 4.4 percent at €6.065 by 1225 GMT (8:25 a.m. Eastern time) after earlier hitting a session high of €6.12. The stock was outperforming a 1 percent rise in the DJ Stoxx index for the European auto industry.

Some traders also suggested that Marchionne might have withdrawn from the Frankfurt show to prepare an upcoming roadshow for truck and tractor maker Fiat Industrial, which is merging with its U.S. unit CNH. However, Fiat Industrial stock was only up slightly Monday.

Marchionne is the chairman of Fiat Industrial.

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Alex Bwogi

I would like to act as seller of this car in uganda, can give a job please?

September 13 2013 at 4:16 PM Report abuse rate up rate down Reply

Fiat wants all of Chrysler so they can get at the money Chrysler is making. dke, you are very wrong, just like your idle Romney who is still licking his wounds. By the way, if you are drawing or planning on drawing social security you should thank a democrat. If you want to end these two fine programs vote republican.

September 09 2013 at 10:47 PM Report abuse rate up rate down Reply

I think Fiat should only keep the share they have now in Chrysler. They own enough of Chrysler. Chrysler is doing well, while Fiat is struggling.

September 09 2013 at 9:11 PM Report abuse +1 rate up rate down Reply

When can I buy a new Alpha Romeo in the states? The local Fiat dealer just keeps saying soon.

September 09 2013 at 4:48 PM Report abuse +2 rate up rate down Reply

FIAT wants CHRYSLER US Dealer Network -- Look for JEEP to be sold off and many of Chrysler US plants to be shut down.

Romney was right --- JEEP will be sending even more jobs overseas. I hope you Obama voters are watching this. Romney tried to warn you all.

September 09 2013 at 4:33 PM Report abuse -3 rate up rate down Reply
1 reply to dkelmstra's comment

Your comment makes no sense since Fiat already has dealerships in the US,also Chrysler is making money while Fiat is losing money.
By the way no Jeep sold by Chrysler is built outside the US.

September 09 2013 at 6:00 PM Report abuse +4 rate up rate down Reply
1 reply to toledojeeper's comment

everyone knows how this goes, doesnt matter that chrysler is makey money, your watching the collapse of the u.s foks

September 09 2013 at 7:20 PM Report abuse -3 rate up rate down
Gary Marshall

Marchionne is an automotive genius and finantial genius.

September 09 2013 at 3:23 PM Report abuse +1 rate up rate down Reply

FIAT a shoe box on wheels

September 09 2013 at 3:04 PM Report abuse -2 rate up rate down Reply

Soon, Europe, Japan, China will own most of U.S. businesses. I guess those countries have been running businesses for hundreds of years longer than the U.S. , so they're better at it. Chrysler will no longer say, "Imported from Detroit" Maybe, "Imported from Turin, Italy" ?

September 09 2013 at 12:55 PM Report abuse +1 rate up rate down Reply

Disgusting to hear this news. Fiat was run out of the USA in the 70\'s for selling un repairable and unwarranteeable deathtraps of horror. Now they will buy out Chrysler, gut the employees, underengineer all of the product lines, and gut the company at the cost to naieve Americans who buy they\'re junk. Guaranteed it will depreciate faster than it will ever accellerate, and that\'s only if you survive the first accident.
Who gave the ok to come to the USA, buy anything, buy anyone, perform any acts you wish, and rob consumers with zero repercussions? Who left the doors unlocked and let the crooks come on in and help themselves?

September 09 2013 at 12:52 PM Report abuse +4 rate up rate down Reply
4 replies to grinsoften's comment