Last week’s report in the Asia Times, citing unnamed sources, laid the foundation of a rumor that Hyundai has its eyes on Fiat Chrysler as a potential takeover target. FCA CEO Sergio Marchionne’s history of attempting courtships with other major automakers only served to bolster the idea. If General Motors and Volkswagen seemed so attractive, why not Hyundai?
Forget about it, claims a Hyundai spokesman.
The sources claimed Hyundai Motor Group CEO Chung Mong-koo is waiting for FCA’s share price to fall before making a takeover bid. Also swirling in this rumor was an activist shareholder who holds $1 billion in Hyundai stock (Paul Singer), a CEO on the verge of retirement (Marchionne), an FCA chairman with a newfound interest in ritzy media companies (John Elkann), and an automaker without a fleshed-out electric vehicle strategy (FCA).
Combine these factors with the fact that a free trade agreement exists between the U.S. and South Korea, and it all started seeming plausible. And it could still happen, as all things can happen, but Hyundai’s completely denying it.
Michael Stewart, senior group manager for corporate and marketing public relations at Hyundai, told CNET, “That rumor is totally groundless.”
FCA has embarked on a streamlining, profit-boosting campaign to rid the company of a hefty debt and return it to a cash-positive status by the end of this year, just months ahead of Marchionne’s retirement. It’s been said that one of the main reasons for firming up the automaker’s financial ground is to make it an attractive target for a merger. We’re left waiting to see if anyone asks Marchionne to the dance.