Fiat boss dangles US$30bn carrot for reluctant GM to chew onPOSTED BY Nigel Andretti ON 03 September 2015
FIAT CHRYSLER head Sersgio Marchionne says his company must push on with convincing General Motors (GM) intoo a merger because his fiugures say the combined companies could generate US$30 billion (RM126bn) in cash annually.
GM’s board rebuffed a merger proposal from the Italian-American carmaker earlier this year.
The rejection has not stopped Marchionne from working on the plan and lobbying GM investors in an effort to drag the GM board to the negotiating table.
In an interview published with the website of Automotive News, Marchionne said he had studied every detail of a deal that would result in “cataclysmic changes in performance” but had not been able to start a discussion with GM.
“It would be unconscionable not to force a partner,” he said.
The issue facing the FCA board at present was that “an attack on GM, properly structured, properly financed, … cannot be refused. You can play hardball to a point,” Marchionne said.
“It’s too big to ignore.”
Asked whether this meant FCA was considering a hostile takeover, Marchionne said: “Not hostile. … There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you. Everything starts with physical contact. Then it can degrade, but it starts with physical contact.
“I’ve gone through product by product, plant by plant, area by area, and I’ve analysed them all.
“I’ve obviously made some arbitrary assumptions about which architectures survive, which engines survive, and the only deal that offers them the same benefits as we potentially get … is us.”
Marchionne said FCA had received approaches from other potential partners that would be interested in discussions, but GM remained by far the preferred option.
“There are people who are interested in doing deals. I’m not interested in doing deals with them … because there’s a better deal,” he said.
GM’s response was terse.
“Our management and board are always working to maximise shareholder value,” GM responded in a statement Monday.
“After we completed a thorough review of a possible merger with FCA, we concluded that executing our current plan is the best way to create value for GM stockholders.” – Agencies