Fiat Chrysler revs up as Peugeot points to merger potential
INTERNATIONAL - Fiat Chrysler shares jumped on Tuesday to the top of Europe’s STOXX 600 after the president of Peugeot family holding company FFP told French daily Les Echos he would support a new deal and suggested Fiat Chrysler was among the options.
“With them, as with others, the planets could be aligned,” Robert Peugeot was reported as saying, asked about targets for acquisitions or mergers.
Fiat Chrysler (FCA) declined to comment.
Shares in the Italian-American carmaker were up 5.2 percent by 1050 GMT, while Peugeot gained 2.7 percent, helping boost Europe’s autos index which was up 2.5 percent.
Peugeot’s remarks came on the heels of reports the group’s CEO Carlos Tavares is open to deals and that Fiat, General Motors, and Jaguar Land Rover could be ideal partners.
FCA’s new boss Mike Manley, who took over after deal-making guru Sergio Marchionne died last year, said this month the carmaker was open to pursuing alliances and merger opportunities if they make sense and strengthen its future.
FCA is often cited as a possible merger candidate because of its strong exposure to the North American market, where it generates the lion’s share of profits, and because of its popular Jeep, RAM and Maserati brands.
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“PSA is essentially an EU pure play as things stand (roughly 90 percent of consolidated unit sales in EU) so an acquisition of a company with a broader reach would make strategic sense,” said Evercore ISI analyst Arndt Ellinghorst.
Investors and analysts alike were wary of betting on an imminent deal, though, mindful of potential antitrust obstacles.
“Although we believe that some M&A could materialize in the automotive sector, we do not expect it in the short term,” said Mediobanca Securities analyst Andrea Balloni.Reuters