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Stellantis denies merger rumours with Renault
The purpose would be to fight against the Chinese electric companies
By: Thiago Moreno
Published by: Brian Potter
Feb 10, 2024 at 6:14am ET
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According to a report by Automotive News Europe, Stellantis chairman John Elkann has denied rumours of a merger with Renault, in response to speculation in the European press about a possible union of the two carmakers under the aegis of France.
In a statement issued, Mr Elkann said: "There are no plans to merge with other manufacturers. He reiterated Stellantis' commitment to a plan to bring together the Italian government and all the players in the automotive industry to meet the challenges of the electric transition.
Speculation about the merger intensified after the Italian newspaper Il Messaggero suggested that the French government, Renault's largest shareholder and holder of a stake in Stellantis, was considering a merger between the two groups. France is said to be considering such a union in order to strengthen its position in the automotive sector and to face growing competition from China and Germany, as the Italian publication reports.
Read also:
Stellantis does not seek mergers with other manufacturers
As a result of this speculation, Renault shares were reported to have risen by more than 4% on Monday (6 February), boosted by media speculation about the possible merger, but trimmed their gains to 1% after Mr Elkann's comments.
Automotive News Europe recalls that following the withdrawal from Russia, which was Renault's second largest market at the time, and the scaling back of global cooperation with Nissan, the French carmaker was seen as a potential merger and acquisition target. The recent downturn in the electric vehicle market led Renault to cancel plans to float its electric vehicle and software unit, Ampere, once again intensifying speculation.
Despite its financial recovery in recent years, Renault retains a relatively low market value of just over €10 billion. By contrast, Stellantis is considered one of the most profitable groups in the automotive industry today, with a market value of over €85 billion.
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European analysts are already questioning the logic of a possible merger between the two entities. The interpretation is that Europe would not be the priority for any potential merger activity between Stellantis and the French company, arguing that Renault does not offer significant scale in other parts of the world. Such an operation would therefore come up against antitrust obstacles.
Carlos Tavares, CEO of Stellantis, commented last week on the challenges facing the automotive industry, including the rise of Chinese manufacturers, EU efforts to phase out combustion engines and onerous union contracts, highlighting the increasing likelihood of mergers and acquisitions. Tavares said Stellantis was preparing for an era of consolidation in the automotive industry.
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