Shares of Fiat Chrysler Automobiles soared 8% in morning trading on Monday following the news that the company turned down a buyout offer from an unnamed Chinese automaker because it wasn’t high enough.
According to Automotive News, the unnamed firm made Fiat Crysler an offer slightly over the company’s market value this month. While it’s unclear which company made the offer, Dongfeng Motor Corp, Great Wall Motors, Zhejiang Geely Holding Group, and Guangzhou Automobile Group are all reportedly in discussions to acquire Fiat Chrysler.
If a sale does go through, Fiat Chrysler would sell its profitable Jeep and Ram brands, as well as Chrysler, Dodge, and Fiat. However, the deal would exclude Maserati and Alfa Romeo.
Fiat Chrysler has been up for sale for over two years now, but the company has received no serious offers. CEO Sergio Marchionne has been working to make the company more efficient to appeal to buyers.
The Chinese government has been pushing Chinese businesses in recent years to acquire international assets, such as Geely’s acquisition of Volvo in 2010. Just last week, Bloomberg reported that Chinese companies plan to spend $1.5 trillion acquiring overseas companies over the next decade, 70 percent more than the last ten years.
FCAU remains a Zacks Rank #3 (Hold). With a VGM score of ‘A,’ our consensus estimates show that the company will have strong year-over-year earnings growth for the current year.
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Fiat Chrysler (FCAU) Stock Surges on Chinese Buyout Interest
Shares of Fiat Chrysler Automobiles soared 8% in morning trading on Monday following the news that the company turned down a buyout offer from an unnamed Chinese automaker because it wasn’t high enough.
According to Automotive News, the unnamed firm made Fiat Crysler an offer slightly over the company’s market value this month. While it’s unclear which company made the offer, Dongfeng Motor Corp, Great Wall Motors, Zhejiang Geely Holding Group, and Guangzhou Automobile Group are all reportedly in discussions to acquire Fiat Chrysler.
If a sale does go through, Fiat Chrysler would sell its profitable Jeep and Ram brands, as well as Chrysler, Dodge, and Fiat. However, the deal would exclude Maserati and Alfa Romeo.
Fiat Chrysler has been up for sale for over two years now, but the company has received no serious offers. CEO Sergio Marchionne has been working to make the company more efficient to appeal to buyers.
The Chinese government has been pushing Chinese businesses in recent years to acquire international assets, such as Geely’s acquisition of Volvo in 2010. Just last week, Bloomberg reported that Chinese companies plan to spend $1.5 trillion acquiring overseas companies over the next decade, 70 percent more than the last ten years.
FCAU remains a Zacks Rank #3 (Hold). With a VGM score of ‘A,’ our consensus estimates show that the company will have strong year-over-year earnings growth for the current year.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>