Hyundai Denies "Groundless" Rumor It Plans To Buy FCA

Industry News

And FCA refuses to comment.

Only a few days ago we reported Hyundai and Fiat Chrysler Automobiles were holding secret merger talks. This really didn’t come as much of a surprise, considering FCA CEO Sergio Marchionne has been very vocal about his desire for a merger with another automaker for a few years now. He previously knocked on GM’s door but no one answered. But the fact Hyundai may be in the picture is quite interesting. For starters, the South Korean automaker is flush with cash these days.

It’s also worth noting that both automakers previously held preliminary talks last year about a potential collaboration on fuel-cell hydrogen technologies. Roadshow reached out to Hyundai for comment regarding a possible FCA merger and, not surprisingly, denied everything. “That rumor is totally groundless,” said Hyundai Corporate and Marketing Public Relations official Michael Stewart. FCA declined to comment. That denial and silence, it needs to be pointed out, does not mean this deal won’t happen. Both Hyundai and FCA are publically traded companies and merger/buyout talks would certainly be felt in their respective stock prices, for better or worse.

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The market and shareholders could react favorably to these talks, or they may not. Again, if a deal is being cooked up both companies want to keep it quiet until they’re good and ready to make an announcement. One major issue that likely still needs to be worked out is leadership. Marchionne plans to retire next April and Hyundai CEO Mong-koo is 80 years old. Who will replace them both? If the merger talks are serious, will one individual be sought for the job? It also needs to be noted that the U.S. and South Korea have a free trade agreement that would unquestionably be extremely beneficial.

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