Fiat SpA Chief Executive Officer Sergio Marchionne said his efforts to merge the Italian automaker with Chrysler Group LLC may have hit a snag as a retiree health care trust that owns a minority stake pushes instead for an initial public offering of the American carmaker.

The United Auto Workers’ trust may try to sell part of its 41.5 percent holding through an IPO by the first quarter, Marchionne, who runs both automakers, told reporters Friday at an event in Turin. Fiat then may buy the trust’s holding at the market price, he said.

“The dialog is going on; we are not getting closer but we keep on talking,” Marchionne said. An eventual share sale at Chrysler “may delay” the merger. 

The CEO, 61, said Chrysler will file IPO documents by the end of the month with the U.S. Securities and Exchange Commission to list a 16.6 percent stake, which the trust has the legal right to do. The two are also in a court dispute over the value of part of the trust holding which Fiat has options to buy.

“It gets much trickier for Fiat to buy out Chrysler minorities after an IPO,” said Erich Hauser, an analyst at ISI Group in London. “Marchionne’s plan to merge the two carmakers and get his hands on Chrysler cash may be at risk.”

Fiat dropped as much as 21 cents, or 3.4 percent, to 6.03 euros and traded 1.7 percent lower as of 3:02 p.m. in Milan. The shares have gained 62 percent this year, valuing the Turin-based company at 7.67 billion euros ($10.2 billion). 

Marchionne has spent the past four years seeking to unify the companies so they can better compete with Toyota Motor Corp., General Motors Co. and Volkswagen AG. A fully integrated automaker would feature the mass-market Fiat, Chrysler, Jeep and Dodge brands, along with the high-end Maserati and Ferrari lines.

“I will work my buns off to get the best possible reception in the equity market but there’s a limit to my talents,” Marchionne said. “I can do whatever I like at the time,” he said when asked if Fiat would buy the holding at price set by the IPO process. (Bloomberg)