* Manager Magazin: VW's Piech has had talks with Fiat owners
* VW says no takeovers on agenda, focusing on efficiencies
* Fiat and top shareholder say no talks have taken place
* Fiat shares pare gains after initial 5 pct jump
(Updates with VW quotation)
By Andreas Cremer and Agnieszka Flak
BERLIN/MILAN, July 17 Fiat Chrysler has
denied a magazine report saying it's in merger talks with
Volkswagen, while the German carmaker said it had no
takeovers on its agenda.
Germany's Manager Magazin said on Thursday Volkswagen (VW)
Chairman Ferdinand Piech had held talks with the owners of Fiat
Chrysler about buying all or part of the group that was formed
this year from the merger of Italian and U.S. carmakers.
The magazine cited unnamed company sources.
However, a VW spokesman said Europe's biggest carmaker was
focused on delivering improvements at its existing operations.
"There are currently no M&A (merger and acquistion) projects
on the agenda," he said. "We are now focusing on boosting
efficiency across the group."
The Agnelli family's holding firm Exor, which owns
a 30-percent stake in Fiat Chrysler, denied any talks had taken
place, as did Fiat Chrysler.
Shares in Fiat Chrysler jumped 5 percent to 7.98 euros on
the report, but had retreated to stand up 2.2 percent by 1352
GMT. VW's stock was 1.8 percent lower.
VW Chief Executive Martin Winterkorn said in March the
carmaker, though hoarding almost 18 billion euros ($24 billion)
in cash, had no plans to expand the group through acquisitions
as it was focusing on integrating its 12-brand network.
VW has since sealed a 6.7-billion euro buyout of minority
shareholders at Swedish truck division Scania to forge a
long-planned alliance of its truck brands.
The report could suggest "diverging views" between VW's
management and the supervisory board about the carmaker's future
course, said Arndt Ellinghorst, a London-based analyst at
investment researchers ISI Group, at a time when Winterkorn, 67,
and Piech, 77, are soon likely to face a debate over succession.
Rather than talking about further expansion, top managers at
VW - concerned that profitability gains aren't keeping pace with
the company's steadily-growing size - have been pushing a new
efficiency programme that includes 5 billion euros of cost cuts
per year at the core passenger-car brand.
Earlier this month, VW also denied a report it was planning
a bid for U.S. truck maker Paccar next year.
INTERESTED IN ASSETS?
"The risks from integrating Italian plants and managing a
U.S. business are material and we do not believe that the
potential benefits justify the risks," Ellinghorst wrote in a
note to clients.
A person familiar with the situation told Reuters that VW
would more likely bid for Fiat assets such as Magnetti or Alfa
Romeo rather than the entire company.
A member of VW's supervisory board, which oversees the
management board, said the 20-member panel had at no point of
time had any discussions about a purchase of Fiat.
Still, Piech and Winterkorn have repeatedly expressed
interest in Alfa Romeo despite rebuttals from Fiat CEO Sergio
Manager Magazin said VW was hoping to use Chrysler's U.S.
distribution network to help solve its own problems in the
world's No. 2 auto market where flagging sales of the VW brand
in January sparked the ouster of VW's regional chief.
However, VW's U.S. troubles "are more image and pricing
problems and not so much problems of distribution and
manufacturing," an auto analyst said. "Buying Chrysler would not
really help VW."
Fiat took full control of Chrysler at the start of 2014,
creating the world's No.7 auto group, and plans to list the
merged Fiat Chrysler Automobiles in New York later this year.
Chief Executive Sergio Marchionne has said he wants Fiat
Chrysler to follow bigger rivals such as VW by building global
brands and strengthening its position in the fast-growing and
high-margin market for premium cars.
The company is counting on its founding merger and a U.S.
listing to help foot the bill for its 48 billion-euro plan to
grow net profit five-fold and sales by 60 percent by 2018.
While rumours of a potential Agnelli family exit have
surfaced over the years in Italian press, Exor has repeatedly
said the stake remained a strategic investment for the family.
Manager Magazin also said VW and Fiat Chrysler's owners were
far from reaching an agreement about a possible price.
($1 = 0.7390 Euros)
(Reporting by Andreas Cremer; additional reporting by Jan
Schwartz, Sophie Sassard and Arno Schuetze.; Editing by Maria
Sheahan, Jason Neely and Mark Potter)