Is Fiat Chrysler Looking To Acquire Another Carmaker?

Jan 06, 2015 06:00 PM EST | Jordan Ecarma


Does Sergio Marchionne have another merger in the works?

As pointed out in a Bloomberg report, Marchionne's planned Ferrari spinoff opens the door for new deals that could let Fiat Chrysler Automobiles compete with Toyota, the world's biggest automaker.

The spinoff maneuver essentially lets Fiat Chrysler keep owning Ferrari for now since it puts the luxury sports brand in the hands of the Agnelli family--aka Fiat Chrysler's biggest shareholder.

In a strong position as the fastest-growing carmaker in the United States, FCA is a $14 billion company that could potentially challenge Toyota as No. 1 if it brought another carmaker on board.

"There's room for megadeals in the car industry in the medium term as carmakers will be forced to share development costs," Stefano Aversa, managing director of strategy consultancy AlixPartners in London, told Bloomberg. "No carmaker can sustain the investment needed alone, not even the biggest ones."

Fiat Chrysler set up the Ferrari spinoff to raise money. As part of the push to put $5 billion toward cutting debt, the automaker also issued shares and convertible bonds in December, Bloomberg reported.

So whom could Fiat Chrysler partner with next? Bloomberg posits that American carmaker Ford could be the Italian-American company's No. 1 choice.

"Ford has been the North Star for Fiat ever since Fiat's founder Giovanni Agnelli visited Detroit in the 1910s," Giuseppe Berta, a Bocconi University professor who formerly headed Fiat's archives, told Bloomberg. "There are distinct affinities between Fiat and Ford."

On the other hand, a Ford spokeswoman and another industry source have told Bloomberg that the Dearborn, Mich.-headquartered carmaker isn't interested.

Germany's Volkswagen is put forward as another possibility, while Jalopnik wonders if either of the Japanese automakers Mazda and Suzuki--with the former being more likely--could pair well with Fiat Chrysler, which has grown into the world's seventh-biggest automaker after the merger.

FCA posted U.S. sales of 193,261 units last month, a 20 percent increase year over year that marked the group's best December sales in a decade, according to the automaker. The company passed 2 million units for the year to report its best annual sales since 2006.

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