Several Chinese Companies Reportedly Submit Bids For Fiat Chrysler

Tyler Durden's picture

After learning over the weekend that Trump plans to call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers, we learn that several Chinese companies may have submitted bids for Fiat Chrysler (FCA) in a deal that would include the company's iconic Jeep brand.  According to AutomotiveNews, at least one Chinese automaker made a bid earlier this month for FCA at a slight premium to the company's prevailing market price but it was rejected for being too low.

Representatives of a well-known Chinese automaker made at least one offer this month to buy Fiat Chrysler Automobiles at a small premium over its market value, Automotive News has learned. The offer was rejected for not being enough, a source said.

 

Meanwhile, other sources independently identified executives from other large Chinese automakers conducting their own due diligence on a potential purchase of FCA, including meeting last week with representatives of U.S. retail groups about a potential acquisition. A source said FCA executives have traveled to China to meet with Great Wall Motor Co. And Chinese delegations were seen last week at FCA's headquarters in Auburn Hills, Mich.

 

It's unclear which Chinese automaker or automakers are pursuing FCA. Different sources have pointed to involvement by different ones — Dongfeng Motor Corp., Great Wall, Zhejiang Geely Holding Group or FCA's current joint venture partner in China, Guangzhou Automobile Group. But it is also unclear which company or companies are likely to follow through or succeed.

 

Unsurprisingly, FCA isn't talking, nor are any of the four Chinese automakers. But if a sale proceeds, the quintessentially American Jeep brand — once owned by the Germans and most recently by the Italians/Dutch — may soon be owned by the Chinese.

Jeep

 

According to AutoNews, any sale likely would involve FCA's highly profitable Jeep and Ram brands, as well as Chrysler, Dodge and Fiat, but would exclude Maserati and Alfa Romeo which would be spun off.

Interest from China comes amid a push by the government to acquire international assets in order to gain further access to markets outside China.

A government directive dubbed China Outbound pushes Chinese businesses to acquire international assets from their industries and operate them "to make their mark," much as Geely has done since acquiring Volvo in 2010. Bloomberg reported last week that Chinese companies plan to spend $1.5 trillion acquiring overseas companies over the next decade — a 70 percent increase from current levels.

 

"Right now, Chinese automakers enjoy the full support of the leadership in Beijing to go and make it happen," Dunne said. "That's something brand new, and it's really picked up since 2015."

 

Along with Volvo, Dunne pointed to Italian tire maker Pirelli and German robotics giant Kuka as Chinese acquisitions supported by the China Outbound policy.

Of course, given Trump's focus on domestic auto production and intellectual property violations by China, something tells us this particular deal will be somewhat 'complicated' politically.  That said, FCAU shareholders seem to be somewhat optimistic this morning...

FCAU

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FreeShitter's picture

Let them have that shit company. 

Haus-Targaryen's picture

Oh good, maybe the Chinese can try what the Germans and now the Italians are trying ... to save the American automobile industry. 

 

Linus2011's picture

exactly. american italian crap motors. as bad as it can get. noone sane in germany besides insane schremp from daimler would touch this crap

Haus-Targaryen's picture

I still ... to this day cannot understand what the thought process behind this was.  

Lets take one of the best brands in the automotive world, and purchase perhaps one of the worst.  What could possibly go wrong? 

They would have done better purchasing Saab (RIP) and turning them into their FWD "fun in the snow" division.  

TheDude1224's picture

Chrysler has changed ownership more than a $3 whore behind a dumpster. Stockholders will be pleased as the Chinese seem to be more business savvy than the Germans and the Italians.

Sandmann's picture

Daimler was full of hubris and blew $36 bn saving Chrysler from Kirk Kerkorian only to offload the junk pile for $7.4 bn 8 years later. Then again Schrempp did no due-diligence because German auto executives are stupid, unbelievably stupid and arrogant which is why their whole sector is going to be devoured by China. Without selling 800,000 units a year in UK Germany is screwed. They have zero battery making capacity for electrics and are wedded to diesel engines saturated in urea to keep their showboat sailing.

To think 50% VW profits come from 238,000 Porsches

Stuck on Zero's picture

Daimler purchased Chrysler to force labor concessions from the German govrenment. They threatened to move their corporate HQ to the US. It worked. The German government backed down. The Chinese government wants FCA for the dealerships to sell Chinese made cars. They will shut down all the manufacturing in the US.

Blankone's picture

Not so sure about your comments on VW. When you look at their offerings they have better focus and hit several customer sectors hard. With the Jetta you can get an upgraded sports suspension and lively motor, Passat is well portioned and again an upgraded motor is available although not a V6. Maybe that was the reason for their diesel being attacked by the US govt.. It combined with the chassis had a loyal following. (It seems VW was not the only player using programing to beat the emissions tests)

But this would be a marriage of like minded groups. Chrysler and China.

bluskyes's picture

Daimler bought Chrysler for it's R&D.

Germans are fine crafstmen, but poor industrialists. They don't get the concept of good enough, or general purpose reusable. That's why VW was buying chrysler caravan bodies for their over-prices scheiss-van

Falling Down's picture

What happened is the opposite of what folks in the auto rowld thought would happen.

Merecedes was in trouble for some years, so Daimler soaked the truck and Jeep profits from Chrysler, while the cars Chrysler made went to shit. The LH platform was garbage, I'd rather drive a K car than one of those shitmobiles, but there was nothing in the pipeline until the LX platform (300/Charger/etc,) came along, with rear suspension tech from Mercedes.

Daimler did Chrysler no favors, really, besides the suspension tech. Chrysler has been mismanaged for decades, the bean counters ran them into the ground around the time Daimler took them over. Then Daimler let the bean counters continue their bulshit.

I would buy a new truck, but they're too expensive. They finally have a quality, robust transmission (joint venture between ZF and Chrysler). Just not worth the effort to buy one, on my end. Same with their expensive Jeeps, and they're expanding in Toledo, I expect Chrysler will need another bailout at some point in the near future, they're too far into debt.   

peopledontwanttruth's picture

Are the Chinese really buying it, who or what own the Chinese. We've all seen articles and links on here a few people own everything or about everything.

http://www.businesspundit.com/5-corporations-that-own-almost-everything/

https://www.forbes.com/sites/bruceupbin/2011/10/22/the-147-companies-tha...

I think this is just programming for even us at ZH to forget there isn't capitalism. There's no markets. There's a handful of "people" who in their godlike minds run and own it all.

Don't take your eyes of the ball.

HenryKissingerBilderberg's picture

Are the Chinese really buying it, who or what own the Chinese. We've all seen articles and links on here a few people own everything or about everything.

probably those (((chosen))) families who can PRINT money

lil dirtball's picture

> (((chosen))) families who can PRINT money

It's much more than that. (((They))) dictate what you think, feel, buy ... etc.

Read all about it:

http://mileswmathis.com/updates.html

See also:

http://www.historyisaweapon.com/defcon1/bernprop.html

peopledontwanttruth's picture

Thanks lil I knew about Eddy

Great links, this whole thing is coming to its head but it's way more sinister than we can truly wrap our minds around.

Edward Bernays the father of propaganda

https://www.google.com/search?q=father+of+propaganda&ie=UTF-8&oe=UTF-8&h...

peopledontwanttruth's picture

Yup that was my point. They own not just the companies but the governments and it's representatives because they own the banks to.

It's the game Monopoly on steroids, it's being the banker with unlimited cash, they have loaded dice and even if they'd land on another's property they have the cash to pay for it, until they own the entire board.

Arnold's picture

Agreed, it will kill them.

Union Made.
Union destroyed.

ToSoft4Truth's picture

The UAW will now preach "Buy Chinese". 

Linus2011's picture

exactly. american italian crap motors. as bad as it can get. noone sane in germany would touch this crap.

FoggyWorld's picture

Sorry, I have one I bought after Sandy took my sports car away and my little Fiat 500 honestly is nice little, reliable car.

robertocarlos's picture

Oh yes, there is nothing like a $100k german car with pot metal parts and plastic gears in the main throttle aasembly. 

silverer's picture

Otto needs to hear about this.

GunnerySgtHartman's picture

Chrysler should have been broken up and the parts sold off to the highest bidder back in 2009.  But I digress ...

The only things worth any money at FCA are trucks and Jeeps.  Minivans are a dying segment; other than possibly some of the hot-rod cars under the Dodge umbrella (which all ride on an ancient platform from the late 1990s), nobody is really interested in FCA's passenger cars.

It would be funny to watch the Chicoms buy FCA and then lose their shirts on it in an economic meltdown.  Chinese interest in foreign acquisitions reminds me of how the Japanese went on a foreign buying spree in the late 1980s, only to get their clocks cleaned with the recession of 1989-1991.  They then sold their assets at below-purchase prices to raise cash.  What is it about the Asians that they buy at the top of the market???

Hyundai was making some noise about buying FCA a few months ago in an attempt to break into the US truck market, but that apparently went nowhere.

Stuck on Zero's picture

The Jeep Cherokee was a great, simple, tough, easy to fix machine that sold all over the world. So they ruined it.

silverer's picture

My friend just bought a new Jeep Patriot, coming from a Liberty,  about two months back.  He said the same thing.  He said they're "less Jeepy".  I think you know what he meant.

any_mouse's picture

Chinese have hot money that needs to flow outward.

It's only FRNs and UST anyway, not like it is Au.

China has been under the spell of the (((bankers))) since the Boxer Rebellion. AngloAmerican China.

Smedley Darlington Butler (three last names is always a tell) played a part in installing the bankers as the last Emperor of China. Check Miles W Mathis web site for the report.

HRClinton's picture

Maybe they will power them with Ukrainian rocket engines, now that the Ukes hsve been outed to be selling them to NK. 

AFAB, right?

JackMeOff's picture

Wonder if this is way to park money while your own GDP is tanking?

RagaMuffin's picture

The issue probably is not the price but the setaside for the pending warranty claims          ;-)

Herodotus's picture

They should wait another year and purchase the company when it is in bankruptcy.

Herodotus's picture

When trading US Treasuries for FIAT is considered a "flight to safety", you know that we are on the edge of the abyss.

GlassHouse101's picture

China is going to run the new monetary system (the ACChain)

Eagle Keeper's picture

I guess they will then call the Jeep a CHeep

Arnold's picture

A lot of Liberty s running around with sub, sub prime financing.

flacorps's picture

Crystal Jeep (upper West Coast of FL) is offering 100 months at zero interest. Do MoPars even last that long?

GeezerGeek's picture

I persohally found funny cars much more fun to watch when they looked like stock-bodied cars. Now they go faster and look like toys, not real cars.

Same goes for NASCAR. Try going to a Ford dealer and trying to buy a 2-doof Fusion with a V-8.

GunnerySgtHartman's picture

100 months at zero interest

Unreal!  We are definitely on the edge of the cliff!

silverer's picture

Maybe you'll like the Chinese "Jeep" type vehicle better.

http://truckyeah.jalopnik.com/meet-the-chinese-militarys-new-jeep-174454...

After all, Chrysler pansy-ized the Jeep anyway for shopping moms.

any_mouse's picture

In LatAm pronounced "heep".

Xena fobe's picture

They already own Volvo.  They are just interested in the technology. 

silverer's picture

They must have heard that Volvo builds jets. I'm not impressed with Volvo automobiles. I used to work on them. I'd rather own a Toyota.

Sandmann's picture

Volvo doesn't build jets......Saab does

silverer's picture

You didn't get my humor.  The whole thing is a wrong call.  By the way, is Saab still around?  Last I heard, not good.

Albertarocks's picture

And on a slightly different topic... people from the Philippines call that car a Bolbo.  They can't say the letters "V" or "F" like we do... they say them as a "P" or a"B".  I knew a Philipino lady who worked in a grocery chain store.  She was telling me about her favorite yogurt, Cherry and Fig, only she pronounced it as Cherry & Pig.  I laughed so hard I nearly pissed my pants buy didn't have the heart tell her why I was laughing.

And now, back to the main program.

Seasmoke's picture

Opens up 131 points. Every time I think I've seen it all. They just come up with an even bigger fraud in our faces to amaze me.

Seasmoke's picture

Where's the fucking trade war we were promised ???

Arnold's picture

Really?
Fiat is a tactical nuke.

silverer's picture

So let's see. US government record on this one is the US taxpayer paid to keep Chrysler in business building cars, and the company was saved but then ended up with Italian owners. Now the Chinese want to buy it. The US taxpayers needs to pat themselves on the back for making all these wonderful deals possible.

FoggyWorld's picture

And I have one of those Fiats and see a future of no spare parts or dealers!  

And only after I bought the car did I find out that it was assembled in Mexico.

a Smudge by any other name's picture

I spent some time formulating a responses to this. He's forming an investigation into hmm hmm hmm into hoo hoo hoooo hee hee hee hee he's gonna form an investig....grr hrrr hrrr ha ha ha ha ha HA HA HA HA HA HA oh god BWA HA HA HA HA HA HA HA (deep breath) BWAAAAAAAAAAAAAA HAAAAAAAAAAAAAA HAAAAAAAAAAAAAAAAAA HAAAAAAAAAAA please no more AAAAAAAAAAAH HAAAAAAAAAAA HAAAAAAAAAAAAAA HAAAAAAAAAAAA HAAAAAAAAAAAA HAAAAAAAAAAAAA (deep hacking coughing fit) please...help....i'm dying. Oh god (pant pant pant) oh god don't do that again. Heh. Thought I was a gonner there for a sec. Heh heh heh hee heeee heeeeeeeeeeeee haw HAW HAW HAW OH MAN HERE IT GOES AGAIN BWAAAAAAAAAAAAAAAA HAAAAAAAAAAAAAAA HAAAAAAAAAAAAAA HAAAAAAAAAAAAAAA......