Peugeot parent Stellantis denies Renault merger rumours

French carmaker Renault is considered a strong candidate for a merger or takeover, but according to Stellantis – which has French roots of its own and now also owns the former Fiat Chrysler business – says it won't be among any suitors.

Setting the scene: Stellantis, parent company to 14 car brands, has a market capitalisation of $70 billion, is the third largest carmaker by volume and one of the most profitable, and boasts a share price that has increased by 75 per cent since 2019.

Renault is a minnow by comparison, with a market cap of $11 billion.

It exited the Russian market (for geopolitical reasons), throttled back on the scale and scope of its partnership with Nissan, and has cancelled the initial public offering for Ampere, its electric vehicle and software division (due to reduced demand and lower growth forecast for EVs).

Renault’s share price has fallen 40 per cent since 2019, and it is seen by pundits as a potential merger and acquisition target. No surprise, a Stellantis takeover has been the subject of some speculation.

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The Italian press reports that a merger may be afoot

Italian daily Il Messaggero reported last week that the French government, which is Renault's largest shareholder and also has a stake in Stellantis, was assessing plans for a merger between the two.

A Renault spokesperson said the following day that the company does not comment on rumours. France's Finance Ministry also declined to comment.

The Italian government has previously accused Stellantis – which now counts Italian brands Abarth, Alfa Romeo, Fiat, Lancia and Maserati in its stable – of acting against the national interest. Industry Minister Adolfo Urso has even raised the prospect of the Italian government forcing a stake in Stellantis to help balance the French influence.

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Financial analysts question the value of a Stellantis-Renault merger

Some analysts have questioned the objectives and benefits of a Stellantis-Renault merger, as it would effectively add to Stellantis’s excess capacity in Europe.

Investment Bank Jefferies said that Europe would not be the priority for any potential Stellantis merger and acquisition activity. Renault does not offer any significant scale in other areas of the world, and a merger would also face antitrust obstacles.

Stellantis Chairman denies a merger with Renault is part of the plan

Stellantis Chairman John Elkann has denied any plans for a merger with Renault exist.

Speaking with Reuters [↗], Elkann said that Stellantis – the world's third largest carmaker by sales – is focused on implementing its long-term business plan. "There is no plan under consideration regarding merger operations with other manufacturers," said Elkann.

Stellantis CEO Carlos Tavares may be keeping the door open for a merger, however, stating in a recent interview with Bloomberg that the group was "ready for any kind of consolidation" and Stellantis would be "one of the winners".

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Renault shares had risen more than 4% before paring back after Elkann's comments to trade flat.