A direct overture by Chinese automaker Great Wall Motor Co Ltd to Italian-American automaker Fiat Chrysler Automobiles NV sent FCA shares up sharply on Monday, as investors cheered the potential sale of the storied Jeep brand.
It was not immediately clear whether Great Wall Motor wanted all or part of FCA, reports Reuters
Automotive News first reported earlier on Monday that Great Wall Motor's President, Wang Fengying, plans to contact FCA to discuss acquiring the Jeep brand.
"With respect to this case, we currently have an intention to acquire. We are interested in (FCA)," an official at Great Wall Motor's press relations department told Reuters. He declined to give his name and gave no further details.
Two people familiar with the matter said Great Wall Motor had asked for a meeting with FCA to make an offer for all or part of the group.
FCA, which is incorporated in the Netherlands and based in London, said in a statement it had not been approached by Great Wall Motor, and was implementing its current business plan. Its main investor, Italy's Agnelli family, declined to comment.
FCA Chief Executive Sergio Marchionne has said that he wants to find a partner or buyer for the world's seventh-largest automaker as costs rise to comply with emissions regulations and develop technology for electric and self-driving cars.
So far, however, Marchionne and company chairman John Elkann have not opened the door to selling Jeep or the profitable Ram truck business in North America as standalone units.
If Marchionne is willing to sell Jeep on its own, other automakers like Volkswagen AG, General Motors Co, or Ford Motor Co might show interest, analysts said.
Jefferies said in a research note last week that a key question of a Chinese acquisition of some or all of Fiat Chrysler is the "political feasibility of such a transaction given (automaker mergers and acquisition) is often held to a different standard in the current political environment.”
But Jefferies noted "Chrysler's background which has included multiple changes of ownership, including two foreign acquirers" in two decades.
Jeep targets sales of 2 million vehicles in 2018 worldwide, up from 1.4 million in 2016. Marchionne has said deliveries from the SUV brand could eventually rise to as many as 7 million a year.
Great Wall Motor, China’s largest sport utility vehicle (SUV) and pickup manufacturer, would be making an audacious move in taking on FCA, which has a market value of more $20 billion after a 48 per cent runup this year.
If Great Wall, with a market value of about $16 billion, bought FCA it would be China's largest overseas automotive industry deal to date - dwarfing Geely's 2010 billion acquisition of Volvo cars.
Fiat Chrysler's shares rose nearly 7 per cent to close at $13.44 in New York on Monday, and also rose by the same percentage in Milan, the highest share price for Fiat in 19 years.
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