General Motors, the largest US automaker and Fiat Chrysler Automobiles, the third largest US carmaker, are getting ready to line up their financial advisors to do battle as the companies have reached a stand-off in regards to a merger bid.
According to sources that have knowledge of the matter, the two companies are reaching out to their investment banks to provide assistance in dealing with the clash as FCA has been trying to force a deal with its Detroit-based competitor – even as the latter refused any discussions on the matter. According to the sources, talking on condition of anonymity because of the sensibility of the subject, General Motors has called for help from Goldman Sachs and FCA is enlisting UBS, with one person also adding Morgan Stanley on GM’s friendly list. The Italian-American automaker FCA, the seventh largest in the world and the third biggest in the US has sent a proposal to meet and discuss a potential merger to GM, but the board refused and the latter’s chief executive officer, Mary Barra, commenting last week they were not interested in such a partnership.
On the other hand, the blunt rebuff has not discouraged FCA’s own chief executive officer, Sergio Marchionne to keep on envisioning a merger strategy, said the people and his attention turned to GM investors in an effort to force the board to come to the negotiations table. A master of tie-ups, Marchionne, 63, has shared his opinion that acting globally the auto industry needs further consolidation to reign on development and research costs.