Hyundai Might Buyout Fiat Chrysler

Hyundai Might Buyout Fiat Chrysler

According to sources, Hyundai Motor Group CEO Chung Mong-Koo is watching FCA's stock closely and allegedly intends to buy enough shares to take over the rival automaker.

Fiat Chrysler merger rumors are in the news once again, this time with Hyundai. The ageing South Korean CEO is keen to make the move by May 2019, when FCA holds its annual shareholders meeting and current CEO Sergio Marchionne will retire.

Rumour has it that Hyundai is eyeing a merger with FCA after Asia Times claimed it spoke to unnamed sources who said the planning was underway. That's not the only advantage for both parties.

If the two firms were to become one, they would create the world's largest automotive group. The two companies would also have the least product and manufacturing overlap, compared to other carmakers like Volkswagen - such redundancies could trigger factory shutdowns that would be met with nearly insurmountable opposition.

Tariffs on European cars could cut USA production — BMW warns officials
However, whether they buy circuit boards in the USA or overseas, the majority of the raw components still come from China. Benchmark U.S. crude fell 12 cents to $74.03 a barrel in electronic trading on the New York Mercantile Exchange.

Perhaps most advantageous of all, for FCA at least, is that it has no electric vehicle strategy.

The report suggests that Fiat Chrysler's controlling families, the Elkanns and Agnellis, are eager to leave the carbuilding business behind once Marchionne steps down. It's believed Hyundai is simply waiting for FCA stock prices to drop.

A current free trade agreement between the US and South Korea would also help facilitate the merger and lower import/export costs compared to higher tariffs on European models.

Hyundai's manufacturing footprint in the U.S.is also relatively small, unlike GM or VW, and would be exponentially improved if a merger between Hyundai and FCA happened.

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