According to industry analysts and traders, General Motors has taken seriously the attempt by Fiat Chrysler Automobiles CEO Sergio Marchionne to force their hand into a merger – as demonstrated by the company’s decision to consult investment banks.
Not long ago Sergio Marchionne sent a letter of intent to his peer – GM’s chief executive officer Mary Barra – but he was swiftly dismissed by the executive and the automaker’s board of directors. Immediately, the FCA leader turned to investors in a bid to persuade activist shareholders it would be in their best interest to push for merger talks. Barra then openly discussed the opportunity and said last week she was not interested in a partnership for the largest US automaker and the third biggest in the world. Now the latest report puts GM seeking advice from Goldman Sachs and Morgan Stanley to fend off the feisty FCA chief as he aggressively seeks the aid of GM shareholders to try to force their hand to get them to the negotiations table.
Analysts believe GM has taken the road because they also consider the option to be at least possible and would want to know what possible benefits they would have from striking a deal with FCA – or at least have compelling answers for the shareholders when they say a tie-up is a no go. Experts also agree that marrying GM with FCA would yield major cost savings thanks to platform and production network sharing, integration of the European units and overlap in South America. The merger would also bring anti-trust investigations in the US and would also risk many jobs.