Automotive News Europe — 2024-02-06
Automotive Industry
The French government continues to support Renault Group's strategy of remaining a standalone automaker with several industrial and technological partnerships, a finance ministry source said, amid reports that Paris is studying a Renault merger with Stellantis.
Italian daily Il Messaggero reported on Sunday 4 February that the French government, which is Renault's largest shareholder and also has a stake in Stellantis, was examining plans for a merger between the two groups.
Asked about the government's position towards Renault's strategy, the source on Tuesday said there was "no change."
Stellantis Chairman John Elkann denied on Monday that the carmaker had merger plans, responding to press speculation about a tie-up with Renault, which has declined to comment.
The government has from the start supported Renault CEO Luca de Meo's strategy to build up a new France-based electric and software unit called Ampere alongside Renault's legacy internal combustion engine and hybrid businesses.
While recognizing that Renault lacks the scale and resources of its rivals, the government has also supported the company's efforts to build ties beyond its traditional allies Nissan and Mitsubishi by striking up partnerships with Geely, Saudi Aramco, Google and Qualcomm.
With its stock market value stagnating around €10 bn ($10.7 bn) despite improved finances, Renault is often cited in financial markets as a potential takeover target.
The group's decision last week to scrap Ampere's initial public offering rekindled such rumors, which had previously surfaced after the group's 2022 exit from Russia, its second biggest market after France at the time.
Stellantis is one of the most profitable groups in the industry and has a market cap of more than €85 bn when unlisted shares are factored in.
Stellantis is the product of a merger in 2021 between France's PSA Group and Fiat Chrysler Automobiles, with brands including Fiat, Peugeot and Jeep. Stellantis's 14 brands include Citroen, Jeep, Opel and Alfa Romeo.
Before the merger to create Stellantis, Renault appeared on the cusp of a merger with Fiat Chrysler in 2019, a plan that was scrapped at the last minute because of objections by Nissan.
The merger discussion in Italian media was fueled by Stellantis CEO Carlos Tavares's remarks last week.
He said that the ascendancy of Chinese manufacturers, the European Union's efforts to phase out combustion engines, and the United Auto Workers union's costly new contracts were among the factors fueling greater potential for M&A.