Italian automotive manufacturer Stellantis has denied a possible French-led merger with rival Renault. The company’s Chairman John Elkann confirmed that there are no M&A plans as speculated by media. “There are no plans being studied regarding mergers of Stellantis with other manufacturers,” he said in a statement, adding that the group was focused on the execution of its long term business plan.
The statement comes after Italian daily Il Messaggero reported that the French government, which is Renault’s largest shareholder and has a stake in Stellantis, was studying a merger plan between the two groups. However, the speculation has now been denied after which the company’s shares stood 1.2% higher by 1220 GMT, having initially risen more than 4%.
After abandoning the Russian market, at the time 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. The speculation of merger intensified after an electric vehicle market slowdown forced it last week to cancel IPO plans for its EV and software unit Ampere. Moreover, the company’s market cap remains stubbornly low at little over 10 billion euros (USD10.8 billion) despite a financial recovery over the past few years.
On the other hand, Stellantis has a market cap of more than 85 billion euros when unlisted shares are factored in. The automobile giant is the product of a 2021 merger between France’s PSA and Fiat Chrysler and is currently one of the most profitable groups in the industry. The company consists of various brands under one umbrella such as Citroen, Jeep, Opel and Alfa Romeo.
In a separate development, Stellantis has been in murky waters after crossing 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.