Hyundai Says FCA Buyout Rumor Is “Totally Groundless”

Hyundai has denied rumors that it is planning a massive buyout of FCA shortly before chief executive Sergio Marchionne steps down.

Responding to a report from Asia Times suggesting that a buyout bid is imminent, Hyundai Corporate and Marketing public relations manager Michael Stewart told CNET indicated the reports are unsubstantiated.

“That rumor is totally groundless,” he said.

FCA has declined to comment on the reports and while Hyundai doesn’t appear to be having any of it, that doesn’t entirely rule out the possibility of a massive deal between the automakers.

Still, a possible merger makes a lot of business sense

Asia Times suggested that Hyundai chief executive Chung Mong-koo has been keeping a close eye on FCA’s stock price and wants to initiate a buyout when the company’s value drops before its annual shareholders’ meeting in the spring of next year.

If Hyundai and FCA were to occur, the combined company would be the world’s largest automaker. As with other buyouts of this kind, a Hyundai purchase of FCA would result in a close collaboration between the automakers in the development of new and existing vehicles.

Marchionne has long pursued a merger having previously expressed interest in joining forces with General Motors and Volkswagen. A merger with Hyundai would also give FCA access to the South Korean automaker’s electric technologies, something which FCA desperately needs. Additionally, a free trade agreement between the United States and South Korea makes a merger much more likely to be approved than one between FCA and a Chinese carmaker like Great Wall.