Jeep’s market value is 20% higher than its parent company Fiat Chrysler Automobiles—and $2 billion more than the potential Chinese buyer.
Chinese automaker Great Wall Motor (ranked 652 on Forbes’ Global 2000 list) is preparing a bid to acquire the Jeep brand from Fiat Chrysler Automobiles (ranked 224), with the ambition of becoming the world’s largest SUV manufacturer.
According to sources in Detroit, Great Wall president Wang Fengying—who was listed at No. 69 on Forbes’ 2016 ranking of the most powerful women—confirmed in an email that the company has already reached out to FCA to discuss a potential deal for Jeep. Later, a Great Wall spokesperson told the Financial Times that the interest might extend beyond Jeep: “We have always had interest and plans to acquire Fiat Chrysler Automobiles,” the representative said.
Fiat Chrysler, the world’s seventh-largest carmaker, responded that Great Wall had not made any official approach to signal interest in Jeep or any other FCA brand. Still, earlier in April 2017, then-CEO Sergio Marchionne acknowledged that Jeep and Ram could potentially be spun off as separate companies, just as Ferrari was in 2016.
In mid-July 2017, Forbes U.S. cited research by Morgan Stanley analyst Adam Jonas, who estimated Jeep’s market value at $20.6 billion—roughly 20% higher than FCA’s own market capitalization. As of August 21, the Italian-American company was valued at €16.45 billion, compared to Great Wall’s $18.1 billion.
Any attempt to sell one of America’s “Big Three” brands to a Chinese buyer would likely run into political resistance in Washington. President Donald Trump has pushed for tougher restrictions on China, accusing Beijing of unfair trade practices. In a July 25 interview with The Wall Street Journal, Trump said he was considering quotas or higher tariffs to limit steel imports from China, though he added: “We don’t want to do that just yet.”
By late July, reports surfaced that Trump’s top advisers were drafting a sanctions package against China, though debate continued over whether to impose trade limits or broader economic penalties.
Founded in 1984, Great Wall Motors is now China’s third-largest automaker and leads the domestic SUV market, selling 1.1 million vehicles last year. Its top seller is the Haval H6. If the Jeep deal went through, Great Wall would become China’s second-largest automaker and the world’s leading SUV manufacturer. Jeep itself would join the list of global car brands under Chinese ownership.
That trend has been evident for years: in 2010, China’s Geely purchased Volvo Cars from Ford. In June 2017, Geely acquired a 49.9% stake in Malaysia’s Proton, gaining control of Lotus. And in 2011, Dongfeng Motor bought 14% of PSA Peugeot Citroën, Europe’s second-largest carmaker.
Other examples include India’s Tata Group, which owns Jaguar Land Rover. Meanwhile, Fiat Chrysler shares rose 4.2% in Milan trading on Monday, while Great Wall stock climbed 2.06% in Hong Kong.