UPDATE: Fiat Brushes Off Opel Report; Market Likes Idea
23 April 2009 - 3:02PM
Dow Jones News
Fiat SpA (F.MI) Thursday refuted a report in German magazine Der
Spiegel that said the Italian carmaker will acquire a majority
stake in Germany's Adam Opel GmbH.
Fiat Chairman Luca Cordero de Montezemolo firmly denied the
company has any plans to buy Opel, but investors and analysts are
looking favorably at a possible Fiat-Opel tie-up.
"We believe that a Fiat-Opel deal is far more compelling than
the proposed Chrysler deal" because it would make Fiat Europe's
number-two carmaker, said Max Warburton, an analyst at Bernstein
Research, in a report April 20.
A spokeswoman for Opel, a European unit of General Motors Corp.
(GM), declined to comment on the speculation.
The report said Fiat will sign a memorandum of understanding for
the acquisition Tuesday. It quotes an Opel employee representative
as saying he would fear "a dramatic reduction in Opel jobs and the
closure of factories in Germany."
Fiat shares rose in Milan after it lost less than expected, also
lifted by speculation that the company could sign a deal with Opel,
a trader said.
At 1220 GMT, Fiat shares were up 0.8%, or EUR0.06, at
EUR7.54.
"If Fiat were to buy Opel it would have to make concessions to
the German government in terms of promising to maintain employment
levels," a Milan-based analyst said. "But from an industrial point
of view it would be interesting for Fiat, because the synergies
could lower Fiat's cost per unit."
Magazine Web site: www.spiegel.de
-By Frankfurt Bureau, Dow Jones Newswires; 49-69-29725-500
(Jennifer Clark in Milan contributed to this story.)