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By Bloomberg

Fiat Chrysler Automobiles NV shares fell in Milan after the New York Times reported that General Motors Co. in March rejected an invitation from Chief Executive Officer Sergio Marchionne to discuss a merger.

The stock fell as much as 3.4 percent and was down 3 percent at 10:15 a.m., giving the company a market value of 18.6 billion euros ($20.4 billion). Fiat Chrysler has gained 45 percent this year.

“Chances that an M&A deal happens are lower now than one or two months ago,” Banca Akros analyst Gabriele Gambarova wrote in a note to clients today. While the news that GM turned down Marchionne was negative, “we argue that the best candidate for a merger is VW and that GM comes second by far,” Gambarova said, referring to a possible deal with Volkswagen AG.

Marchionne said last year in an interview with Bloomberg that he sees the potential to form a new industry leader, as automakers grapple with low returns on the growing amount of money needed to build new cars. The CEO has since been vocal on the need for consolidation, even titling a presentation to analysts last month “Confessions of a Capital Junkie,” to draw attention to the industry’s heavy capital consumption.

Marchionne e-mailed GM CEO Mary T. Barra in March to start talks on potential merger, the Times reported May 23, citing two people familiar with the matter. GM decided against meeting with Marchionne to discuss the plan, according to the Times. A Fiat spokesman declined to comment.

Marchionne said in March that a merger with GM or Ford Motor Co. would be "technically feasible," while Barra said this month that GM can earn a better return on its own. A Ford representative said last month that the carmaker had no plan or interest other than focusing on its current business plan.

“Waiting for positive news on Ferrari’s valuation, investors are using GM’s rebuff to sell a stock which has gained more than 40 percent this year,” IG strategist Vincenzo Longo said by phone, referring to Fiat Chrysler’s plan to spin off the luxury carmaker later this year.