Auto Stock Roundup: Fiat-Renault Merger Plan, Toyota's Investment In Ride-Sharing Firm
Zacks Investment Research | May 29, 2019 09:39PM ET
The past week saw Fiat Chrysler Automobiles N.V. (NYSE:FCAU) proposing a tie-up with Renault (PA:RENA) SA (OTC:RNLSY) of France to set up the third biggest automaker in the world. The underlying aim of the planned collaboration is to vehemently enter the burgeoning electric and autonomous vehicles industry. With an anticipated annual vehicle production of 8.7 million, the merged entity is set to rewrite the global auto industry.
In another development, Japanese auto giant Toyota Motor Corporation (NYSE:TM) is considering investing around 550 million in China-based ride-hailing upstart, Didi Chuxing. The increased investment made by global auto majors in the autonomous vehicle sphere, might have prompted Toyota to resort to such a move.
The week also witnessed motorcycle maker Harley-Davidson, Inc. (NYSE:HOG) to have reportedly closed the factory in Kansas City, MO due to its waning sales. The shutdown, announced in early 2018, caused a loss of 800 jobs.
Recap of the Week’s Most Important Stories
1. Genuine Parts Company (NYSE:GPC) will acquire the outstanding 65% stake in Sydney, Australia-based Inenco Group (‘Inenco’). After completing the acquisition, Genuine Parts will have 100% ownership in Inenco. Prior to this, on Apr 3, 2017, the company bought 35% interest in Australia-based Inenco. The recent majority stake purchase will be funded through a combination of cash and borrowings. Subject to the fulfillment of customary closing conditions, the deal is likely to close on Jul 1, 2019.
Founded in 1954, Inenco is among the top industrial distributors of bearings, power transmission and seals. It has a presence across Australia, New Zealand and Asia with more than 160 locations. This industrial supplier in Australia is expected to generate $400 million in annual revenues.
Owning 100% stake in the leading industrial distributor of Australasia will support Genuine Parts’ plan to expand base in the world’s rapidly growing marketplace. Inenco’s skilled management is projected to be a good addition to Genuine Parts’ industrial portfolio. This is in sync with the company’s strategy of acquiring businesses to improve product offerings and strengthen its global platform for driving robust and sustainable sales growth. (Read more: Original post
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