Is a Fiat-Chrysler (NYSE:FCAU) GM Merger on “The Fire”?
Sergio Marchionne, CEO of Fiat-Chrysler Automobiles NV, suggested that US President Elect Donald Trump might support the idea of General Motors Co (NYSE:GM) merging with his automobile company.
Mr. Marchionne said he could still do 1 more big deal in his career, alluding to efforts to merge Fiat-Chrysler with another automaker.
He previously has said that GM would be the best partner, and Monday, he ventured that Donald Trump might just appreciate such a union. He later added that he is not currently pursuing any combination as he just focuses on reaching the carmaker’s Y 2018 financial targets.
“From what I understand, I believe that Trump should like a GM-Chrysler tie-up,” Mr. Marchionne told reporters at the Detroit International Auto S
GM CEO Mary Barra had no interest in merging with Fiat-Chrysler when Mr. Marchionne suggested it in Y 2015. At the time, Ms. Barra said GM could post strong financial returns on its own. GM’s position has not changed, said a spokesman. “We take the same position now that we did back then,” he said.
Monday, Donald Trump praised Fiat-Chrysler’s announcement a day earlier to invest $1-B in Michigan and Ohio factories, adding 2,000 jobs and the ability to make 3 Jeep models and heavy-duty Ram trucks currently made in Mexico.
Those investments were already in the works and were not made to avoid criticism from the President Elect, Mr. Marchionne said.
Mr. Marchionnne, who said he has no “bad news” on Y 2016 results, said the company’s Magneti Marelli component unit is not essential for the carmaker and could be spun-off after Y 2018.
He said a separation of luxury brands Maserati and Alfa Romeo is not in the works.
Investors are no longer seeing his Y 2018 targets as a “Fantasyland” the company is working to meet its Y 2018 goals and aims to reach $7-B 5 in net cash, improving from a negative position today. Part of the goal is eliminating debt.
“We are the only indebted carmaker,” he said. “I wan’t to get rid of debt as soon as possible.” He reiterated the carmaker’s top priority is reaching Y 2018 financial targets.
Mr. Marchionne said he may not need to wait for Y 2018 results to pay the company’s 1st dividend. “Why not before?” he asked rhetorically. “Let’s see how we close 2017.”
|NYSE:FCAU||10.57||9 January 2017||0.15||10.57||10.67||10.42||9,364,400|
|HeffX-LTN Analysis for FCAU:||Overall||Short||Intermediate||Long|
|Bullish (0.43)||Bullish (0.27)||Very Bullish (0.59)||Bullish (0.42)|
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