TURIN (Reuters) - Italian carmaker Fiat FIA.MI Chief Executive Sergio Marchionne said the company’s decision to raise its stake in loss-making publisher RCS Mediagroup (RCSM.MI) was a investment for the long term.
Fiat emerged as RCS Mediagroup’s largest shareholder on June 28 with the surprise announcement it will almost double its stake to 20 percent for a reported 90 million euros ($115.51 million).
The stake increase was followed by press speculation that it was intended to trigger consolidation in the sector, with some reports saying there was a plan for a tie-up with Rupert Murdoch’s News Corp (NWSA.O). Earlier this month Fiat Chairman John Elkann denied the reports.
“We would not have made the investment if it were not strategic,” Marchionne said on the sidelines of a conference in Turin.
Marchionne has jettisoned many of Fiat’s none-core investments since his arrival at the automaker in 2004, but he held on to RCS Mediagroup even when the automaker was struggling to survive.
RCS, the publisher of influential daily Corriere della Sera, is controlled by a group of banks, families and industrial groups. Fiat, which also owns Turin daily La Stampa, has held a stake in RCS off and on since the 1970s.
Most of Italy’s largest newspapers are owned by industrial groups with non-media core businesses.
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Reporting by Gianni Montani, writing by Jennifer Clark; Editing by Louise Heavens