Summary
- Comment follows weekend report of possible Renault tie-up
- Stellantis far outstrips Renault in valuation terms
MILAN, (Reuters) – Stellantis Chairman John Elkann on Monday denied the carmaker had merger plans, responding to press speculation about a possible French-led tie-up with rival Renault.
Elkann said that the Peugeot owner, the world’s third largest carmaker by sales, was focused on implementing its long-term business plan.
“There is no plan under consideration regarding merger operations with other manufacturers,” said Elkann, who also heads Exor, the Agnelli family holding company that is the largest single shareholder in Stellantis.
After abandoning the Russian market, its second largest after France, and reducing the scope of its global cooperation with Nissan, Renault has been seen as a potential M&A target.
Speculation intensified after an electric vehicle market slowdown forced it last week to cancel IPO plans for its EV and software unit Ampere.
Its shares have lost 40% of their value over the last five years, exceeding a 13% loss for European rival Volkswagen, while Stellantis shares have gained 75% over the same period.
Renault market capitalisation remains stubbornly low at just over 10 billion euros ($10.8 billion) despite a financial recovery over the past few years.
Stellantis, the product of a 2021 merger between France’s PSA and Fiat Chrysler and one of the most profitable groups in the industry, has a market cap of more than 67 billion euros, broadly in line with Volkswagen’s 64 billion euros.
Stellantis has a 14-brand portfolio also including Citroen, Jeep, Opel and Alfa Romeo.
NEWSPAPER REPORT
Italian daily Il Messaggero had said on Sunday that the French government, which is Renault’s largest shareholder and also has a stake in Stellantis, was studying plans for a merger between the two groups.
A spokeswoman for Renault said on Monday the group did not comment on rumours. France’s Finance Ministry had declined to comment on Sunday.
Stellantis has crossed swords with the Italian government, which has accused it of acting against the national interest on occasions. Industry Minister Adolfo Urso last week raised the prospect of the Italian government taking a stake in Stellantis to help to balance the French influence.
Renault shares pared gains after Elkann’s comments to trade flat, having initially risen more than 4%.
Stellantis CEO Carlos Tavares, a Portuguese-national, last week said in an interview with Bloomberg that the group was “ready for any kind of consolidation” and that its job was to make sure that it would be “one of the winners”.
Analysts, however, question the rationale of a Stellantis-Renault merger, which would also expand the group’s excess capacity in Europe. Renault is led by Luca de Meo, an Italian whose previous roles included working at Fiat.
Jefferies last week said that Europe would not be the priority for any potential Stellantis M&A activity, with Renault not offering significant scale in other areas of the world, while a deal would also face antitrust obstacles.
($1 = 0.9304 euros)
Reporting by Giulio Piovaccari in Milan; additional reporting by Danilo Masoni in Milan, Gilles Guillaume and Mathieu Rosemain in Paris Writing by Keith Weir and Giulio Piovaccari Editing by Amanda Cooper, David Goodman, Kirsten Donovan and Barbara Lewis
