VW Looking at Fiat-Chrysler Acquisition?

2015 Alfa Romeo 4C 1 photo
Photo: Alfa Romeo
Reports are starting to come out this afternoon that Volkswagen AG and Fiat Chrysler Automobiles have recently held discussions for the German automaker to acquire some or all of the newly formed Italian-American FCA. The original news came from unnamed sources in a German magazine article, and while both automakers are denying that any talks took place, a report on Yahoo! takes a deeper look at what such rumors might mean.
According to the article, the most likely explanation for the talks (if they did, in fact, take place) is that VW could once again be looking at buying Alfa Romeo from Fiat. As late as last spring, VW’s Audi had reportedly been interested in buying Fiat’s struggling Alfa division, but like similar incidents dating back several years, Fiat CEO Sergio Marchionne was not interested in selling off the Alfa brand. At this point, such a move would be bizarre for Fiat especially considering the investment of both time and money in creation of the all-new 4C (shown above) and the reintroduction of Alfa into the U.S.

Another possible explanation for the rumor could be the fact that Volkswagen AG has high hopes of soon being able to lay claim to the world’s largest automaker, and doing so would require much stronger sales in the U.S. As the article points out, though, VW’s troubles here have more to do with image and pricing rather than manufacturing and distribution.

VW should definitely be able to improve both its image and its pricing when it debuts the all-new U.S.-made, three-row crossover that was confirmed earlier this week. Another report in the Detroit Free Press cites a struggling European market and potential antitrust problems in South America will likely prevent VW from acquiring Fiat as a whole.

Despite both automakers denying the rumors and few possible advantages for such a merger to take place, the report may have affected stock prices today. Following the report, shares of Fiat-Chrysler rose 5 percent before settling back down to 1.38 percent gain, which is where it stands as of this writing. VW stocks, on the other hand, have dropped a little more than 2 percent on the day so far.
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