Blog
Photography By: 
Hyundai Motors

The on-again, off-again merger/takeover chase for Fiat Chrysler Automobiles could be heating up once again, this time with a new player from South Korea.

According to Asia Times, citing sources it calls ‘close to the situation’, Hyundai Motor Group is preparing to launch a takeover bid for FCA sometime between this summer and May 2019 – when current FCA CEO Sergio Marchionne steps down.

The potential takeover would be tied to an expected decline in FCA stock shares during this time period, these sources said.

Marchionne has long 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.

Despite a previous merger rebuff by General Motors, as well as minor flirtations with Volkswagen and Chinese automaker Great Wall Corp., most industry experts still believe Marchionne is looking at possible partners even though he said back in January that FCA is strong enough to stand by itself.

In fact, the Asia Times writes Marchionne personally triggered Hyundai’s current attention by using potential interest from Great Wall Motor Co as a ‘stalking horse’.

The primary force behind a Fiat Chrysler Automobiles and Hyundai Motor Group merger, sources told the Asia Times, would be Elliott Management principal Paul Singer, who is an activist shareholder in Hyundai and major player in Italian equities with stake in Telecom Italia and de facto owner of Silvio Berlusconi’s AC Milan soccer club. Telecom Italia is the largest Italian telecommunications service provider.

Having already amassed a $1-billion stake in Hyundai, Singer appears to have given himself an inside track into FCA by adding FCA Europe, Middle East and Africa CEO Alfredo Altavilla as a board member of Telecom Italia.

Jim Trainor, a Hyundai US spokesman, said in a statement that the company does not comment on market rumors.

Another reason FCA merger talk keeps rising to the surface, the Asia Times speculates, is because current FCA Chairman John Elkann does not have the ability or desire to run the FCA empire once Marchionne leaves.

“(His exit) is clearly the end of an era and maybe more, as Marchionne is not just the mastermind behind FCA, he is FCA,” said Giuseppe Berta, a professor at Bocconi University and former head of Fiat’s archives. “After he is gone, FCA will have to change, and this opens room for a big transformational deal.”

Some even suggest Elkann is much more interested in the news media space these days than in automobiles, having recently taken over the controlling stake in The Economist Group, while also mulling a potential bid for the New York Times Company.

“Elkann is well aware that Fiat Chrysler is going into a perfect storm. Lack of new models, mediocre technology in relation to peers and no real EV [electric vehicle] strategy, all on top of rising oil prices,” one FCA insider said.

Hyundai, unlike its Japanese rival Toyota, is a relative latecomer to the US market and has the most to benefit in taking over the Chrysler distribution network and iconic Jeep brand. Jeep is relatively weak in the Asian market, while Hyundai, along with its sister brand Kia, already has a strong economy car business in North America and would acquire luxury brands like Maserati and Alfa Romeo in buying FCA, along with mega-stars Jeep and Ram. Hyundai is also interested in gaining access to FCA’s vast North American distribution network.

Additionally, unlike Volkswagen and GM, a Hyundai-FCA merger poses significantly fewer manufacturing plant and product overlaps both in the United States and Europe. The US-South Korean Free Trade Agreement – on top of closer ties between the United States and South Korea – could also make a Hyundai-FCA merger more palatable to the Trump administration.

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

Tags: 

Top Jeep Articles

Jeep truck on road
Blog
Jeep Confirms June Arrival For Gladiator, Pleased With Customer Interest
  • Matt Konkle
  • January 16, 2019
FCA announces release date for Jeep's newest vehicle during the North American International Auto Show.
Blog
FCA Recalling 1.6 Million Jeep, Dodge, Chrysler Vehicles To Fix Air Bags
  • Matt Konkle
  • January 11, 2019
Wrangler and Ram are some of the affected models in this latest recall involving faulty Takata air bags.
Blog
Fiat Chrysler To Pay Some Jeep, Ram Owners In Diesel Emissions Settlement
  • Matt Konkle
  • January 10, 2019
Automaker will not admit to diesel emission cheating in $800 million deal with US Government and state agencies.
Rendering of Jeep Gladiator Hercules truck
Blog
Will A Hercules Lift Jeep Gladiator Against Raptor And ZR2?
  • Matt Konkle
  • January 8, 2019
While not official, a high-performance version of Jeep's new Gladiator truck would directly compete with popular Ford and Chevy editions, giving Jeep a foothold into yet another market.
Reference
How Do I Know When My Jeep Needs New Tires?
  • Eric Ammerman
  • January 7, 2019
Wear alone isn't the only reason you may need new Jeep tires. There can be several reasons what you have now needs replacement.
Reference
Differences Between Full, Mid-Width Or Stubby Bumpers
  • Matt Konkle
  • January 4, 2019
With the amount of aftermarket bumpers around, it can quickly become confusing which one is best. We break down three of the most popular
Blog
FCA Soars In 2018 Behind All-Time Record Year For Jeep
  • Matt Konkle
  • January 3, 2019
Brand jumps 17 percent for the year, helping lead Fiat Chrysler to the best sales growth of Detroit's top-3 automakers.
Reference
Halogen, HID, LED – what are the lighting differences and what should I choose?
  • Scott Ammerman
  • December 19, 2018
Halogen used to be the end all to vehicle lighting. These days it is HID and LED. Here are the differences.
Reference
Modifying Your Jeep Seats and Adding Seat Accessories
  • Matt Konkle
  • December 18, 2018