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 in crowd
Blog
First Consumer Jeep Gladiator Rolls Off Assembly Line
  • Matt Konkle
  • March 19, 2019
Long awaited, the brand's first truck since 1992 is now under production for consumer release. It should reach dealer lots sometime in late June.
Blog
Help - I've High Centered And I Can't Get Out
  • Matt Konkle
  • March 15, 2019
Know your limitations when asphalt-crawling in a 2wd Wrangler Unlimited.
Blog
February Wrangler Sales Tumble: Gladiator Angst Or Jeep Overkill?
  • Matt Konkle
  • March 13, 2019
Jeep Wrangler hit its first sales snag in 11 months as potential inventory levels, Gladiator release, loom.
IMAGE GALLERY
March 2019 Jeeps & Java
  • Matt Konkle
  • March 11, 2019

April showers might bring May flowers, but we prefer the saying 'March rain clouds bring Jeep crowds'.

Crowd at Quadratec's Jeeps and Java
Blog
Quadratec Announces 2019 Jeeps And Java Event Schedule
  • Matt Konkle
  • March 6, 2019
Popular Sunday morning Jeep gathering back for 2019 on select Sunday's each month.
Red Jeep Wrangler with open doors and tailgate
Blog
Top Five Products For Tuning Up Your Jeep's Interior
  • Matt Konkle
  • March 4, 2019
Many of us only focus on exterior products when upgrading, but your Jeep's interior can be just as important.
Seats inside Jeep Wrangler
Reference
What Are The Differences In Jeep Seat Cover Materials
  • Matt Konkle
  • February 28, 2019
Seat covers are no longer just some random vinyl material that may or may not fit well over your seats. We break down some of the best materials and their differences.
Reference
Differences Between Soft Top Materials
  • Rick Rotondo
  • February 19, 2019
A Jeep soft top isn't just a one-size-fits-all application. And one of the most important things to consider before purchasing is what kind of material makes up that top. Here are some of the most important material differences.
Blog
Differences Between Jeep Gladiator And Wrangler
  • Matt Konkle
  • February 14, 2019
You may think the latest Jeep design is nothing more than a bed on a Wrangler, but in reality it is so much more.