Hyundai quick to quell FCA takeover rumors

Hyundai could buy Fiat Chrysler Automobiles

Hyundai could buy Fiat Chrysler Automobiles

Hyundai has flatly denied the latest rumor of a takeover bid for Fiat Chrysler Automobiles. The denial may be viewed with suspicion, as the Hyundai-FCA merger rumor has persisted for many months. The ageing South Korean CEO is keen to make the move by May 2019, when FCA holds its annual shareholders meeting and current CEO Sergio Marchionne will retire. If Chung Mong-koo truly wants a takeover, he'll act before Marchionne steps down, the sources claim. It's believed Hyundai is simply waiting for FCA stock prices to drop. A merger could be seen as a way for Elkann to remain away from management, although still overseeing major changes to ensure they are in the interest of his family's brand. That would not be the case with a Hyundai-FCA merger, rumors of which first surfaced past year. In addition, a free-trade agreement between the United States and South Korea would make transporting models between the countries a more economical process - especially in light of the possibility of higher tariffs on imported vehicles from the European Union.

The tie-up would largely finish what Marchionne started after FCA's public offering in October 2014, when the CEO openly explored the idea of a merger with General Motors.

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If a Hyundai-FCA merger were to happen, it would create the world's largest automaker. A spokesman for Hyundai told Motor Authority that the "rumor is totally groundless".

If the company's spokespeople publicly confirm that planning for a takeover is underway, then FCA's shares might not fall because investors would put money to Italian-American firm to benefit from the strategy.

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