FCA likely to wait until Ferrari spin off for GM merger
A deal between FCA and GM won\'t happen this year.
Fiat Chrysler Automobiles will likely wait until the spin off of its Ferrari brand next year to make a bid to merge with auto giant General Motors, a new report finds.
FCA CEO Sergio Marchionne has made it clear that he wants to get a deal done with GM, but that blockbuster move won't likely happen until sometime next year following the sell off of Ferrari, according to Bloomberg. FCA is expected to sell Ferrari during the early part of 2016.
The Ferrari sell off could generate $3.3 billion for FCA. That money would give FCA a more stable valuation and boost the company's chances of pulling of a takeover bid.
So far GM has rejected the idea of a merger with FCA, but Marchionne has indicated that he's not opposed to the idea of a hostile takeover.
"There are varying degrees of hugs,” Marchionne told Automotive News in a recent interview. "I can hug you nicely, I can hug you tightly, I can hug you like a bear.”
Marchionne is adamant that a joined FCA-GM could generate $30 billion in cash per year. That cash flow would come largely from savings realized by joint vehicle development between the two companies. As Ferrari exclusively makes low-volume supercars, the brand isn't critical for Marchionne's merger plans.