Fiat Chrysler CEO open to tie-up talks, just not yet
Fiat Chrysler Automobiles NV, which held informal talks with Zhejiang Geely Holding Group Co. about a potential takeover by the Chinese manufacturer, would be ready to discuss interest from any suitor only after completing a growth plan this year.
“Let the market assess the value of the 2018 plan and then at some point in time if people are interested they should come back and talk, not now,” CEO Sergio Marchionne told reporters Tuesday at the Geneva International Motor Show. “Until that process is complete and the market recognizes the value of what has been accomplished, any discussion we are having in acquiring anything is nonsense.”
Marchionne confirmed Geely “showed up” and had meetings with Fiat executives previously. Bloomberg News reported last week about the approach, which occurred before the company controlled by Chinese billionaire Li Shufu turned its attention toward Daimler AG.
“We met them, had a pleasant exchange and we concluded nothing as we had nothing to conclude,” Marchionne said. “We are all focused on the 2018 plan.” The blueprint will have run for five years through 2018 and includes eliminating debt.
Li approached the Italian-American carmaker in the middle of last year as he was scouting for options to expand outside China, said people familiar with the matter. He opted not to make a formal offer as the two parties had different views on future valuations of Fiat Chrysler, they said.
Signaling he may have moved on, Li announced last month the purchase of a 7.3 billion-euro ($9 billion) stake in Daimler. With that deal – the biggest investment by a Chinese company in an international automaker – Geely has become the German company’s largest shareholder. Geely already owns Volvo Car AB and last year agreed to buy an almost $4 billion stake in truckmaker Volvo AB.
As Geely and other Chinese automakers seek to expand in Europe and the U.S., Marchionne has been a vocal proponent of consolidation, arguing that the industry wastes money by developing multiple versions of the same technology. However, since General Motors Co. rebuffed his idea for a merger in 2015, the CEO has switched gears to cutting debt and has said the carmaker no longer needs a partner.
Marchionne said Tuesday that his arguments for consolidation are still valid and that it’s “obvious” that Chinese carmakers are looking at European rivals.
“If a Chinese or any other investor would buy a stake in Fiat Chrysler, I won’t oppose,” he said. “But if they wish to harm Fiat, then I would get pissed!”