Fiat denies report of merger talks with VW aimed at Chrysler takeover
Media report suggested VW was interested in acquiring Chrysler to improve its struggling footing in the US.
Fiat Chrysler Automobiles
MILAN, Italy — Italian automaker Fiat and its main shareholder have denied on a media report that the company is in merger talks with rival Volkswagen.
The German carmaker also said it had no plans for mergers or acquisitions.
The report by Germany’s Manager Magazine, which did not cite sources, said VW, the world’s No. 2 automaker, was interested in acquiring Chrysler to help it improve its struggling footing in the US, and specified that Fiat’s Ferrari subsidiary would be excluded from any deal. Volkswagen has often expressed interest in Fiat’s sporty brand Alfa Romeo.
Fiat said in a statement no merger talks had taken place, a position that was repeated by its majority shareholder in a separate statement issued at the request of Italy’s market watchdog.
Volkswagen said in a statement that “there are currently no M&A projects on the agenda. We are now focusing on boosting efficiency across the group.” M&A is shorthand for mergers and acquisitions.
Fiat is in the process of completing a merger with Chrysler, which it took over five years ago, to create the seventh-largest global carmaker. Fiat shareholders are set to vote on the final merger Aug. 1.
Bernstein automotive analyst Max Warburton said “it seems the deal is not real” based on the Fiat shareholder statement, but added that would have “a degree of industrial logic” by giving Volkswagen the means to fulfil its ambition to become the world’s largest automaker. It would give it a 15% market share in the US, ahead of Toyota, and a 30% market share in Europe.
On the Fiat side, Warburton noted that the Fiat-Chrysler project has left Fiat with a huge debt and big investments to make, adding “Fiat still faces a complex future.”
© 2014 The Canadian Press