Stellantis Maintains Independence, Denies Renault Merger Speculations

Feb 06, 2024 04:03 AM EST

PHOTO RED CAR DODGE — (Photo : PEXELS/@felipepelaquim -)

Headlines in Italy buzzed with rumors about a potential Stellantis/Renault merger before Chairman John Elkann dismissed any interest, stating that the automaker has no intention of pursuing mergers in response to media speculation about a French-led merger with Renault.

Stellantis Denies Renault Merger

Reuters reported that in a statement, Elkann affirmed that there are no ongoing considerations of mergers involving Stellantis and other manufacturers. He talked about Stellantis'commitment in executing its long-term business strategy.

On the previous day, Italian newspaper Il Messaggero reported that the French government, a major shareholder in Renault and with a stake in Stellantis, was exploring a potential merger between the two entities.

Meanwhile, AutoBlog shared details about this news. After withdrawing from the Russian market, previously its second-largest market, following France, and scaling back its global collaboration with Nissan, Renault has emerged as a potential M&A candidate.

The speculation surrounding a potential Renault merger gained momentum after a downturn in the electric vehicle market led to the cancellation of its IPO plans for its EV and software division, Ampere.

Despite experiencing a financial recovery in recent years, Renault's market capitalization remains relatively low, standing at just over 10 billion euros ($10.8 billion).

In contrast, Stellantis, formed through the 2021 merger of France's PSA and Fiat Chrysler, ranks among the industry's most profitable conglomerates, boasting a market capitalization exceeding 85 billion euros when accounting for unlisted shares. Stellantis boasts a diverse portfolio comprising 14 brands, which includes Citroen, Jeep, Opel, and Alfa Romeo, further reinforcing its robust market presence.

Renault's Statement

Reuters also cited Italian Daily, Messaggero A Renault spokeswoman stated on Monday that the company refrains from addressing rumors, while the French Finance Ministry had declined to provide any comments on Sunday.

Stellantis has occasionally accused the Italian government of acting against the interests of the country in disagreements with it. Last week, Industry Minister Adolfo Urso raised the possibility of the Italian government acquiring a stake in Stellantis to counterbalance the French influence.

Renault shares initially gained but later leveled off after Elkann's remarks, trading without significant changes, despite an initial increase of over 4%. Carlos Tavares, Stellantis' CEO and a Portuguese national, expressed readiness for various forms of consolidation in an interview with Bloomberg last week.

He underlined the team's resolve to become one of the prosperous participants in the sector.Analysts, however, are skeptical of the reasoning for a merger between Stellantis and Renault, as it may worsen the company's excess manufacturing capacity in Europe. Renault, led by Luca de Meo, an Italian executive with previous experience at Fiat, adds complexity to the merger proposition.

About Stellantis

According to its website, They are taking the lead in electrification and software development, integrating cutting-edge technologies into their products and services. Committed to their customers and supported by industry-leading partners, they are focused on the development, engineering, manufacturing, and scaling of groundbreaking solutions in various aspects of sustainable mobility.

This encompasses autonomous, connected, electric, shared, and pre-owned vehicles, as well as micro-mobility solutions, commercial vehicles, and even electric aircraft. Their mission is to pioneer and advance innovations across these domains.