FCA Losing Potential Dance Partners, Foreign and Domestic

Tim Healey
by Tim Healey

First it was Geely. Then Dongfeng. Now add Guangzhou Automobile Group to the list of Chinese automakers that have denied interest in acquiring Fiat Chrysler Automobiles (FCA).

FCA has seemingly been seeking a dance partner for a merger or acquisition for a year or two now, and the company’s stock rose earlier this week when Automotive News reported that a “well-known Chinese automaker” had made an offer to acquire FCA. The company has a market value close to $20 billion. Automotive News reported that the offer was rejected for not being enough.

If you’re reading carefully, you’ll note that just because three of the most well-known Chinese makes have declined interest, it doesn’t mean FCA is standing forlornly along the gym’s wall as everyone else dances. The list of major Chinese automakers is long, and BYD, Chery, SAIC and others could still step up – one of them, or another Chinese manufacturer, could have made the offer that AN reported on.

If the report is accurate, it marks progress for FCA. Fiat Chrysler’s earlier overtures to General Motors went nowhere, and Volkswagen also threw cold water on any attempts at a partnership.

By my count, that makes five automakers – three Chinese, one American, and one German – that have said they were going to be spending the weekend washing their hair when Sergio came calling.

It’s interesting that after two years searching, FCA has reportedly turned down an offer for being too low. Automotive News reported that the offer was just above the company’s market value.

This means Sergio either obviously thinks the company is worth far more than that, or there were other issues with the deal (or both).

A Chinese partnership with/ownership of FCA does make sense – it would give the Chinese automaker access to FCA’s successful Ram and Jeep brands while giving FCA an influx of cash that could help it address the segments where it’s weak.

If the offer was rejected for being a little low, it’s obviously possible that the potential buyer could come back to the table with more cash. If that’s the case, and if a deal is struck, FCA may no longer find itself along the wall.

[Source: Reuters] [Image: Fiat Chrysler Automobiles]

Tim Healey
Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

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  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
  • JTiberius1701 Middle of April here in NE Ohio. And that can still be shaky. Also on my Fiesta ST, I use Michelin Pilot Sport A/S tires for the winter and Bridgestone Potenza for my summer tires. No issues at all.
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
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