Rumors of a Merger Between Hyundai and FCA Reemerge
First surfacing nearly a year ago, rumors of a merger between FCA and Hyundai have once again emerged
Nearly a year ago, rumors emerged of a potential merger between Fiat Chrysler Automobiles and Hyundai. Of course, nothing came of these rumors, as FCA and Hyundai still remain separate automotive entities to this day.
However, murmurs of this merger have recently begun to resurface, as reports released earlier this month suggest that Hyundai Motor Group’s CEO Chung Mong-koo is considering a potential takeover bid of FCA.
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These reports originate from an unnamed source cited by the Asia Times. While that is hardly concrete evidence, it was enough to kick start the rumor mill once again.
FCA’s stock price is currently expected to decline sometime in July. That declining stock value could potentially create an opportunity for another large automaker, such as Hyundai, to swoop in and propose a takeover or merger.
It’s not like FCA is opposed to the idea of such a merger. Throughout his time as CEO of FCA, Sergio Marchionne has approached several automakers, from GM to Volkswagen, about a potential merger.
Marchionne doesn’t have much time left before his tenure as CEO comes to a close. He is currently set to depart in May of 2019, and with no clear successor announced yet, having Hyundai’s leadership already in place could eliminate the need to find a new CEO during the next few months.
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That’s not the only reason why a merger between the two automotive companies would be advantageous for FCA. The Italian automaker’s electric and self-driving efforts are admittedly quite a bit behind the rest of its peers, and teaming up with another automaker to mitigate the cost of such investments would be a potentially wise financial move for FCA.
FCA wouldn’t be the only company to benefit from this hypothetical partnership. Hyundai is currently hurting in terms of sales due to its lack of SUVs, a segment that FCA carries in spades.
If FCA and Hyundai were to merge, the result would be the largest automotive company in the world. During 2016, Hyundai and FCA sold a combined total of 11.5 million vehicles, whereas Volkswagen, currently the largest global automaker, only sold 10.3 million vehicles.
Hyundai was quick to dispel any rumors of such a merger at the moment. Michael Stewart, senior group manager of Hyundai Corporate and Marketing Public Relations, called the rumor “groundless.”
Nevertheless, the fact that this rumored merger has been brought up multiple times does add quite a bit of fuel to the speculative fire.
News Source: CNET