Hyundai CEO Interested in Fiat Chrysler Takeover

A new report published by the Asia Times indicates Hyundai’s CEO is preparing to make a bid to take over Fiat Chrysler Automobiles.

Sources close to the matter allegedly told Asia Times that Hyundai CEO Chung Mong-koo is waiting for FCA’s share prices to fall, at which point he will make a bid for the Italian-American automaker. The publication says Hyundai is expected to make a move to acquire a majority stake in FCA sometime between this summer and FCA’s 2019 shareholders meeting in May 2019.

Longtime FCA CEO Sergio Marchionne is expected to announce his retirement at the annual shareholders meeting next year. Marchionne has been a vocal proponent of automotive industry consolidation, saying there are too many automakers competing with each other and that costs are too high for the business to be sustainable.

Marchionne had previously sought tie-ups with General Motors and Volkswagen. The Italian-Canadian executive also explored a tie-up with China’s Great Wall Motor Co., but this was never considered to be a viable option, Asia Times says. Instead, Marchionne simply feigned interest in a merger with the Chinese company to put the pressure on Hyundai, knowing the Korea automotive giant was also interested in the company.

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There would be little overlap between the two automaker’s portfolios if Hyundai were to acquire FCA. Hyundai and its sister brand Kia already have a strong economy car business in North America and would acquire luxury brands like Maserati and Alfa Romeo in buying FCA, along with large vehicle brands in the way of Jeep and Ram. Hyundai is also interested in gaining access to FCA’s North American distribution network.

There’s also a curious correlation between high-ranking personnel within the two companies. Paul Singer, who is in charge of fund management company Elliott Management, is a major shareholder in Hyundai and also holds equities in Telecom Italia and the Italian soccer club AC Milan. Singer recently named FCA CEO of the EMEA region, Alfredo Altavilla, to the Telecom Italia board, Asia Times points out. Telecom Italia is the largest Italian telecommunications service provider.

If Hyundai and FCA did enter into a merger deal, it would make the resulting company the world’s largest automotive group.

[Source: Asia Times]
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