VW, Fiat deny tie-up report

17th July 2014, Comments 0 comments

German auto giant Volkswagen and Italian rival Fiat rejected Thursday a German magazine report which said they were mulling some sort of tie-up.

Fiat issued a short statement saying "there has been no discussion on a merger of Fiat with Volkswagen."

A VW spokesman told AFP: "there are no M and A (merger and acquisition) projects on the agenda at the moment.

"We're concentrating on boosting efficiency of the group," the spokesman added before declining to comment further.

According to the weekly Manager Magazin, the families that control Volkswagen and Fiat Chrysler are sounding out the possibility of a merger or acquisition.

"The Volkswagen group is sounding out a takeover or partial takeover of rival Fiat Chrysler," the magazine said in an article to be published on Friday.

"Various talks have already been held between VW's key shareholder Ferdinand Piech, and the Elkann and Agnelli families as main shareholders of Fiat."

The magazine quoted company sources as saying that the Italian maker wanted to focus on its Ferrari sports car brand.

While VW has repeatedly expressed an interest in both the Alfa Romeo and Ferrari brands in the past, the talks were focusing mainly on Chrysler, the report added.

Nevertheless, there were still many hurdles to any deal, the magazine continued.

These included differences regarding an appropriate price.

Fiat chief Sergio Marchionne was also looking at other strategic options, the report said.

VW shares were the biggest losers on the Frankfurt stock exchange on Thursday, showing a loss of 1.30 percent in late afternoon trading.

In Milan, Fiat shares had jumped by as much as 3.68 percent in a weaker market earlier in the session.

Analysts were sceptical about a possible tie-up, arguing that Volkswagen had a lot on its hands at the moment.

VW is working hard to integrate its truck divisions and has few management resources to undertake such a major operation.


© 2014 AFP

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