Fiat Chrysler Automobiles CEO Sergio Marchionne has reportedly backed down from his persistent courtship of General Motors.
The outspoken executive has withdrawn his thinly veiled threat of a hostile takeover bid, an idea that surfaced after his consensual merger pitch was publicly rebuffed by GM chief Mary Barra.
“We have been publicly rebuffed, we have been rejected and you cannot force these things,” he said following a shareholder meeting involving the Ferrari spinoff, as quoted by Reuters. “At the moment, we have no intention to do anything hostile.”
Marchionne argued that a combined FCA-GM entity could easily earn $30 billion in profit each year, however, some analysts questioned the math and assumptions behind the estimate.
Barra politely declined the offer, however, an unnamed high-ranking GM executive is said to have asked “why should we bail out FCA?” The comment was interpreted as a reference to FCA’s shortcomings, including a high debt load, product development delays, slim margins and lackluster sales in certain markets.
Some analysts viewed Marchionne’s persistence as a sign of desperation, however, the executive now claims the search for a merger partner was never “a matter of life or death.” FCA will push forward with its five-year investment plan to grow global sales for its key brands, potentially making the company more attractive if the strategies prove successful.