Sat, Sep. 5, 12:02 PM
- News in the automobile industry this week continues to indicate seismic changes are coming.
- The Silicon Valley factor: A deeper commitment by Apple and Google in the automobile sector is widely anticipated, although an all-in bet on the manufacturing side is still considered a reach. Key acquisitions, partnerships, or joint ventures in software, self-driving technology, and infotainment systems could sort out the winners from the losers. German players BMW (OTCPK:BAMXY) and Mercedes-Benz (OTCPK:DDAIF) could be in the mix.
- The Sergio factor: Though the Fiat Chrysler Automobiles (NYSE:FCAU) CEO continues to make some bold projections on the powerful merger synergies a tie-up with General Motors (NYSE:GM) would create, his math works for other combinations within the industry as well. Nissan (OTCPK:NSANY), Tata Motors (NYSE:TTM), Honda (NYSE:HMC), and Volvo (OTCPK:GELYF) are each struggling in various markets.
- The Tesla factor: Tesla Motors (NASDAQ:TSLA) has engaged in a war of words with Toyota (NYSE:TM) in the electric vs. hydrogen debate. The EV automaker is also in a race with General Motors and Nissan over developing a mass-market EV with the driving range and sticker price to sell at scale. There's also been a tug-of-war over employees with Silicon Valley counterpart Apple. With so many enemies, some analysts think Tesla needs more friends in the space. Who has the ~$40B-$50B to buy out Elon or the moxie to strike a strategic partnership?
- Looking for a wildcard? Sony (NYSE:SNE) CEO Kazuo Hirai told the Financial Times this week that his company would absolutely partner with an automobile company if a deal makes sense.
Mon, Apr. 20, 9:51 AM
- What could have been: With Tesla (TSLA -0.5%) in dire straits in March 2013 as the company struggled to fix Model S bugs and convert pre-orders into actual sales, Elon Musk reached out to Larry Page and "proposed that Google (GOOG +1.6%) buy Tesla outright," Bloomberg's Ashlee Vance reports through an excerpt from a Musk book due out on May 19.
- Vance adds Tesla would've cost Google $6B at the time after factoring "a healthy premium" - Tesla's market cap is currently $25.9B. As part of the deal, Musk wanted Google to promise to invest $5B in factory expansions and let Musk run Tesla for 8 years, until it was ready to launch a mass-market car.
- While "Musk, Page, and Google’s lawyers negotiated the specific terms of the deal" in the following weeks, Tesla's Model S sales began to take off, and the company posted its first profit and repaid its DOE loan. No longer needing a white knight, Musk broke off talks.
- A $6B Tesla acquisition would've been one of Google's largest, surpassed in size only by Motorola Mobility. Google, of course, has kept pushing ahead with its self-driving car efforts since 2013; the company has said it's talking with GM, Ford, Toyota, and others about bringing a self-driving car to market by 2020. Tesla has some interest in this space as well.
- Last year, the San Francisco Chronicle reported Musk met with Apple M&A execs in 2013. Apple's reported car efforts have fueled fresh speculation the company will make a bid for Tesla.
Tue, Jan. 6, 8:20 AM
- The spinoff of Ferrari could give Fiat Chrysler Automobiles (NYSE:FCAU) enough breathing room to seek a merger partner, according to auto industry analysts.
- The rising cost of developing clean cars in Europe and the U.S. sets the stage for automakers to join forces through mergers and extended partnerships.
- "Eventually it must happen," notes FCA chief Sergio Marchionne on the topic of mega-mergers.
- No company is too big to be ruled out of the merger discussions due to the benefits of scaling investment costs and matching strengths/weaknesses in Europe, Latin America, China, and the U.S, note insiders.
- Automakers: GM, F, TM, FCAU, HMC, OTCPK:NSANY, TSLA, OTCQX:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY, OTCPK:FUJHY, OTCPK:MMTOF, OTCPK:PEUGF, OTC:RNSDF, TTM, KNDI. OTCPK:SZKMY, OTCPK:MZDAY.
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