Hyundai claims FCA buyout rumor is ‘totally groundless’

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Hyundai claims FCA buyout rumor is ‘totally groundless’

Meanwhile, Hyundai could take advantage of Chrysler's distribution network in the United States and the iconic Jeep SUV brand to shore up flagging sales in the US. Insiders indicate that Hyundai would launch its purchase sometime before Sergio Marchionne leaves FCA next year. One caveat with that, however, is that Hyundai CEO Mong-koo is 80 years old, so retirement is looming.

If Hyundai and FCA were to join forces, the new group would be the largest auto maker in the world, selling around 11.5 million cars per annum. As we've seen with FCA merger rumors in the past, like when Volkswagen was considered a potential suitor, there would be critical product and manufacturing overlaps. A power vacuum at the top, little in cash reserves, lackluster electric vehicle strategy, and dwindling technology could speed any decision about a possible takeover attempt.

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.

According to Asia Times, the plan for the purchase of FCA was initiated by the head of the company, Elliott Management, Paul singer, who has previously invested in Hyundai Motor Group in the order of $ 1 billion.

Speculation about a Hyundai-FCA merger popped up past year when the South Korean company allegedly expressed interest in the tie-up. "That rumor is totally groundless", Hyundai Motor America, corporate spokesperson, Michael Stewart said.

FCA declined to comment on the report.

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.

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