Always a Bridesmaid? FCA Could Be Going It Alone After All

Steph Willems
by Steph Willems

Last week’s report in the Asia Times, citing unnamed sources, laid the foundation of a rumor that Hyundai has its eyes on Fiat Chrysler as a potential takeover target. FCA CEO Sergio Marchionne’s history of attempting courtships with other major automakers only served to bolster the idea. If General Motors and Volkswagen seemed so attractive, why not Hyundai?

Forget about it, claims a Hyundai spokesman.

The sources claimed Hyundai Motor Group CEO Chung Mong-koo is waiting for FCA’s share price to fall before making a takeover bid. Also swirling in this rumor was an activist shareholder who holds $1 billion in Hyundai stock (Paul Singer), a CEO on the verge of retirement (Marchionne), an FCA chairman with a newfound interest in ritzy media companies (John Elkann), and an automaker without a fleshed-out electric vehicle strategy (FCA).

Combine these factors with the fact that a free trade agreement exists between the U.S. and South Korea, and it all started seeming plausible. And it could still happen, as all things can happen, but Hyundai’s completely denying it.

Michael Stewart, senior group manager for corporate and marketing public relations at Hyundai, told CNET, “That rumor is totally groundless.”

FCA has embarked on a streamlining, profit-boosting campaign to rid the company of a hefty debt and return it to a cash-positive status by the end of this year, just months ahead of Marchionne’s retirement. It’s been said that one of the main reasons for firming up the automaker’s financial ground is to make it an attractive target for a merger. We’re left waiting to see if anyone asks Marchionne to the dance.

[Image: Hyundai]

Steph Willems
Steph Willems

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7 of 21 comments
  • Brn Brn on Jul 02, 2018

    Confirm a takeover intent, prices go up. Deny a takeover intent, prices go down, then buy!

  • Akear Akear on Jul 02, 2018

    I told everyone it was fake news.

    • See 2 previous
    • Bd2 Bd2 on Jul 05, 2018

      It's the norm for a company make such denials, so not necessarily telling either way.

  • El scotto El scotto on Jul 02, 2018

    FIAT is global car company; not the great in the US of A, but worldwide never the less. The Agnelli family controls the financial company that controls FIAT. Sergio ain't family; he's a placeholder. Elkann is family, Giovanni Agnelli's grandson. FCA's fate depends on the extended Agnelli family; not, repeat not, what the interloper in the sweater says should happen.

  • PrincipalDan PrincipalDan on Jul 03, 2018

    There have to be a few companies out there who desperately want RAM and Jeep, I could see RWD V8 cars surviving as an "SRT" division, and the Pacifica is on a great platform for anyone who thinks minivans still matter. However given CAFE requirements anyone who bought up many of FCA assets would have to have a pretty fuel efficient lineup of their own to offset the effect.