Analysts: Google-Tesla Merger Not Possible, Could See 'Strong Partnership' Instead

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Google IncGOOG
is rumored to be interested in acquiring
Tesla Motors Inc.TSLA
. This might be music to some investors' ears, but analysts were quick to dismiss the rumor's validity. "I don't think that is possible," Global Equities Research analyst Trip Chowdhry told Benzinga. "I think what would happen is, we would see a strong partnership -- which already exists, by the way." Tesla already uses at least one of Google's core technologies. "Tesla uses Google Maps," said Chowdhry. "Tesla's screen is very much closer to what Android is. The apps that Google has developed are being used by Tesla." Chowdhry believes that if the rumor has any validity whatsoever, it will turn out be an expansion of Google and Tesla's working relationship -- not an actual merger. "I think it could be more [of a] technology partnership than anything else," he said. "I don't think Google will buy Tesla. I don't think that's possible. I think Google would like to make Tesla successful by providing them with various technologies."

Related Link: How Apple Could Help Tesla By Building A Car

If Not Google, Then Who?

Google may not be interested in acquiring Tesla, but that doesn't mean another company won't make a move. "Certainly [Fiat Chrysler CEO] Sergio Marchionne [has spoken] about the need for consolidation," Tigress Financial Partners analyst Ivan Feinseth told Benzinga. "When you're involved in complex manufacturing and distribution, there is economies of scale." Feinseth said there is an argument against a merger with
Fiat Chrysler Automobiles NVFCAU
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, noting that the "premium they would have to pay for Tesla and the overall purchase, they could spend that developing their own electric car." "Tesla's got phenomenal brand equity, an established dealer network, an established charger network, so there is a lot of brand equity and value," Feinseth countered. "However, [with] the premium price, I'm not sure they'd be able to make a positive return at the current level."

'Anything Is Possible'

Feinseth said that while anything is possible, "I'm sure all the automakers have taken notice of the unbelievable success that Elon Musk has produced in both creating the Tesla car and this car company." "I'm sure they are envious, in my view, even though we are neutral on the stock based on the current valuation," he added. "I'm sure executives at the global auto manufacturers certainly look at it and ponder it and are surprised by how far they've come in such a short period of time, because they are a car company that's developed an incredible presence and an incredible product." Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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Posted In: Analyst ColorNewsRumorsM&AAnalyst RatingsTechElon MuskFiat ChryslerGlobal Equities ResearchGoogleIvan FeinsethTeslaTigress Financial PartnersTrip Chowdhry
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