Volkswagen AG (ADR) (OTCMKTS:VLKAY) (ETR:VOW) has held talks with owners of Fiat Chrysler Automobiles about a possible merger, Germany’s Manager Magazin reported Thursday. Both automakers deny that report, however.

Fiat

Fiat S.p.A. (ADR) (OTCMKTS:FIATY) (BIT:F)’s biggest shareholder also reportedly denied Volkswagen’s takeover approach.

Volkswagen eyes takeover

Citing unnamed company sources, the German monthly magazine reported on its website that top-level talks are taking place between Volkswagen and Fiat regarding a takeover or partial takeover of the Italian-American automaker Fiat Chrysler. Recently, Fiat merged with U.S. carmaker Chrysler, and the new company is to be named Fiat Chrysler Automobiles.

According to Manager Magazin, VW Chairman Ferdinand Piech, who is a member of the family that controls the German carmaker, has held several discussions with associates and members of the Agnelli family, which controls Fiat.

Juergen Pieper, an analyst with Bankhaus Metzler in Frankfurt, said: “Volkswagen has an urge to become the No. 1 global automaker, and an acquisition of that size would bring them to their target immediately.”

However, several problems persist, including Fiat S.p.A. (ADR) (OTCMKTS:FIATY) (BIT:F)’s struggles in Europe and potential antitrust issues in South America.

Takeover talks denied by Fiat

In a statement issued today, the Turin-based company said: “Fiat states that they have not held discussion with Volkswagen regarding a potential merger.”

A spokesman for Exor, the holding company that controls Fiat with a 30% stake, said Fiat has not held any discussions with Volkswagen about a potential merger.

Interestingly, after securing full control of Swedish truckmaker Scania AB (STO:SCV-B) (STO:SCV-A) in May, Volkswagen AG (ADR) (OTCMKTS:VLKAY) said it didn’t plan any large acquisitions in the near future as it focuses on integrating its truck operations, which also includes Germany’s Man SE (OTCMKTS:MAOGY) (ETR:MAN).

Volkswagen, which had cash reserves of almost 18 billion euros ($24.36 billion) at the end of March, has repeatedly expressed an interest in Fiat’s Alfa Romeo brand despite rebuttals from Fiat CEO Sergio Marchionne.

Following the takeover news, shares of Fiat jumped 5% to 7.98 euros on the news, while Volkswagen AG (ADR) (OTCMKTS:VLKAY)’s stock was 1.5% lower at 186.70 euros.