Potential bid for all or part of Italian-American group, with specific interest in its Jeep brand, sends target’s shares up in Milan

This article is more than 3 years old

This article is more than 3 years old

China’s Great Wall Motor Company has said it is interested in bidding for Fiat Chrysler Automobiles, which owns brands including Jeep and the truck maker Ram.

A company official confirmed it was pursuing all or part of FCA after the US publication Automotive News reported that a “well-known Chinese automaker” had made an offer this month, triggering a jump in FCA’s Milan-listed shares.

“With respect to this case, we currently have an intention to acquire,” a statement from Great Wall said on Monday. “We are interested in [FCA].”

I think Great Wall Motor is eyeing a global strategy, not just the United States

Sergio Marchionne, chief executive, is seeking a partner or buyer for the Italian-American group to help it manage rising costs, comply with emissions regulations and develop technology for electric and self-driving cars. An acquisition by Great Wall Motor would be audacious, and one of China’s highest profile manufacturing deals to date.

FCA said there had been no approach from Great Wall and was focused on driving ahead with a four-year growth plan.

It said: “In response to market rumours regarding a potential interest of Great Wall Motors in the Jeep brand, Fiat Chrysler Automobiles confirmed that it has not been approached by Great Wall Motors in connection with the Jeep brand or any other matter relating to its business.”

Earlier on Monday, two sources said Great Wall had asked for a meeting with FCA, with the aim of making an offer for all or part of the world’s seventh-largest carmaker. Citing an email from Great Wall’s president, Wang Fengying, Automotive News reported that Great Wall had contacted FCA to express interest specifically in the Jeep brand.

The industry publication said the Chinese company had not made a formal offer or met FCA’s board. Automotive News quoted a spokesman as saying: “Our strategic goal is to become the world’s largest SUV [sport utility vehicle] maker.” “Acquiring Jeep, a global SUV brand, would enable us to achieve our goal sooner and better [than on our own].”

FCA shares rose 3.9% to €11.12 in early Milan trading, outperforming a flat market. Great Wall Motor shares were up almost 3% in Shanghai.

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Yale Zhang, head of the Shanghai consultancy Automotive Foresight, commented: “Jeep is the most logical choice since (Great Wall) wants to be the largest SUV maker in the world.” Ram could be an option, he added, but “the Jeep brand is recognised globally. I think Great Wall Motor is eyeing a global strategy, not just the United States.”

A move for FCA or one of its main brands, if successful, would allow Great Wall Motor to accelerate a planned push into the U.S. market, the two people familiar with the matter told Reuters.

They said Great Wall Motor had been making plans for some time to enter the U.S. market, mainly by upgrading some of its key products and improving branding.

The company this year launched its Wei brand of potentially US-market-ready vehicles. Wei is the surname of the Great Wall founder and chairman Wei Jianjun.