LONDON/BEIJING (Reuters) - Fiat Chrysler Automobiles (FCA) shares jumped early on Wednesday on a report that China’s Guangzhou Automobile Group Co (GAC) was interested in buying a stake, but gave up most gains when the Chinese company denied the report.
Italian newspaper Il Giornale had reported GAC was considering making an offer for a majority stake in the Italian-American carmaker, but a GAC Group spokeswoman said there were “currently no plans for this”.
The two companies already have a partnership that enables FCA to manufacture in China. The wider Guangzhou Automobile Group’s subsidiary GAC Motor declared its intention last year of reaching the U.S. market in 2016. If it is successful, it would be the first Chinese passenger car brand sold to American consumers.
FCA declined to comment on the Il Giornale report.
Its Milan-listed shares jumped more than 3 percent at one point, then fell to stand at 6.29 euros (4.8 pounds), down 0.1 percent, by 1500 GMT with traders attributing the fall to the GAC denial. FCA shares traded in New York were up 1 percent at $7.09.
In late April, in an interview with Reuters, GAC’s top executive said he wanted FCA’s help to enter into the lucrative U.S. market. China is the world’s top automobile market and the United States is second.
“Chrysler’s development in China required our support. Now for GAC Motor’s development in the U.S. we also hope for Chrysler’s support and help,” said GAC Motor General Manager Wu Song on the sidelines of the Beijing auto show on April 27.
Guangzhou Auto was the sixth-largest automaker in China by sales volume last year, including vehicles produced through joint ventures with Fiat Chrysler, Toyota Motor Corp, Honda Motor Co Ltd and Mitsubishi Motors Corp.
Reporting by Sudip Kar-Gupta in London, Jake Spring in Beijing; editing by Bernie Woodall and David Gregorio