Fiat Chrysler's (NYSE:FCAU) Chief Executive Officer Sergio Marchionne is reaching out to hedge funds and activist investors to help persuade General Motors Co (NYSE:GM) to agree to a merger, the Wall Street Journal reported, citing people familiar with the matter.
Continue Reading Below
Marchionne has been emboldened by recent successes of activist investors at GM and sees them as a means to consolidate the auto industry, the newspaper cited the people as saying.
Fiat Chrysler and GM were not immediately available for comment outside regular U.S. business hours.
GM said in March had reached a deal with an investor group over its balance sheet and governance and said it would launch a $5 billion share buyback program in an effort to avert a proxy war with the investors.
Marchionne has repeatedly called for shrinking the number of players in the global auto industry to help sustain the heavy investments needed to meet demands for cleaner, safer vehicles.
Marchionne has sent an email to GM's CEO Mary Barra about a possible merger, but it was not the only such conversation Fiat Chrysler has had with other carmakers, the Italian-American company's Chairman John Elkann said in May.
Reuters reported in April, citing sources familiar with the situation, that Marchionne was hoping for a big deal, possibly in the United States, to plug the carmaker's weaknesses and cement his legacy before stepping down in early 2019.
Marchionne's contacts with activist investors, however, have not yet landed a patron, and a similar strategy could be used with at least one European carmaker, the WSJ said.
(Reporting by Ramkumar Iyer in Bengaluru; Editing by Lisa Shumaker)