The auto industry is a big business and one that’s not likely to shrink anytime soon.
So why not invest in the auto industry’s growing capabilities?
The auto industry makes cars, trucks and SUVs, and it’s also one of the biggest and fastest-growing businesses in the world.
But as you might expect, the auto companies aren’t necessarily happy with the current state of things.
And so it’s no surprise that the auto industries biggest and most powerful shareholders are taking matters into their own hands, with a proposed proposal to buy into a company that has a huge stake in one of its most lucrative segments.
Auto companies like Ford and GM are hoping to buy the car parts and technology companies and merge them into one entity that could offer them more financial flexibility and access to a growing customer base.
If the proposal goes through, the combined company would be called Autozone, which would create a new auto parts company.
But the proposal has some serious hurdles.
According to the proposal, the new company would have to be based in the United States, which is a huge concern to the auto makers.
It would have a monopoly on the auto parts industry.
It’s also unclear how Autozones share value would be divvied up among its customers.
The proposed merger would also mean that Autozons shareholders would have the power to decide how much of a stake Autozon would own in the company.
That’s because Autozonedas equity would be valued at a huge fraction of Autozoner shares.
There are other problems with the proposal as well.
For one, Autozona shareholders would not be able to vote on whether to approve or reject the merger.
They also wouldn’t be able buy a controlling stake in Autozonen, which makes it unlikely that the combined entity would be able do anything to make the merger more appealing to investors.
Also, the proposed merger is being done in secret, so the company could never reveal the terms of the proposed deal.
Autozonal shareholders won’t even be able see how the merged entity would make its way through the courts.
And it could never get the green light from regulators because they wouldn’t want to be the ones to decide on the future of the auto business.
So why would Autozoning even be interested in merging with a company like Ford?
It’s not clear why Autozoons biggest shareholders would want to work with a vehicle that’s being targeted by the federal government and which is the biggest player in the automotive industry, which has been on a steep decline over the past decade.
“This is going to be a huge challenge for the automotive sector in general and especially for the auto sector in Texas,” says Andrew J. Deere, managing director of the Autozonnees investment advisory firm.
Deere says that the merger is the “biggest threat” to the future viability of the automotive market, because it could undermine the growth of new vehicles and make the industry less competitive.
Even if the proposal doesn’t get off the ground, the potential for an auto merger between Autozoni and Ford has some big-name investors and analysts interested in getting in on the action.
In the past, Deere says, “I’ve seen some companies in the past where it didn’t really get the attention that they deserved because it wasn’t the biggest deal that’s been announced, and they were just a small company that wasn’t well-known.”
That could change now that Autosons shareholders are considering a merger.
One investor who thinks the proposal is likely to go through is Tesla’s CEO Elon Musk.
In December, he called on his shareholders to approve the proposed merging of Autónys and Ford.
Musk told CNBC’s “Squawk Box” that he’s open to the idea of a merger with Ford, but that the company will not be “a part of any of it.”
The deal would not happen anytime soon, but if it did, the proposal would be one of a few big steps forward for the future success of the American auto industry.
Follow Jonathan on Twitter: @jonathancassidy