London, United Kingdom – Executives at Fiat Chrysler Automobiles NV (NYSE:FCAU), who have previously signaled intentions to spin off certain car brands today rebuffed speculation of a deal with Great Wall Motor Co. The rumor was first reported by Automotive News last night, with the Chinese automaker said to be particularly interested in the company’s Jeep brand, where sales have been robust in recent years.
As CEO Sergio Marchionne gears up for a five-year business review early next year, FCA seems to be in no hurry to make a quick sale, especially the highly profitable Jeep brand. The deal would have to be cleared by regulators in multiple continents, and will also likely face considerable opposition from the Trump administration over Chinese ownership.
A Fiat spokesperson told the FT earlier today: “In response to market rumors regarding a potential interest of Great Wall Motor in the Jeep brand, Fiat Chrysler Automobiles confirmed that it has not been approached by Great Wall Motor in connection with the Jeep brand or any other matter relating to its business.”
While it’s still uncertain whether the Chinese would bid a full acquisition or a part segment buyout. A deal to fully merge with Great Wall, which is China’s largest SUV maker, would create a behemoth in crossover and sport utilities and crossover. The company’s officials are also not shy of their ambitions: “With respect to this case, we currently have an intention to acquire. We are interested in (FCA),” an unnamed official at Great Wall Motor’s press relations department told Reuters.
London-based Fiat-Chrysler which was created in its current form in 2014 as the result of a merger between the namesake Italian and American car giants. It spun off its Ferrari unit through an IPO in 2015. The company also owns brands such as Dodge, Ram trucks, but its flagship Jeep brand was valued by Morgan Stanley at over $24 billion, with some estimates claiming it can fetch around $33 billion in a Chinese sale. That might be the reason Fiat Chrysler shares were up 7% in New York at close today.