Stellantis denies plan to merge with Renault

Stellantis has been forced to respond to speculation that it will merge with Renault to create a huge new global car-making giant robust enough to tackle existing European competition and the influx of new Chinese brands.

In a short statement, Stellantis chairman John Elkann said: “There is no plan under consideration regarding merger operations with other manufacturers.”

Elkann’s comments follow reports in Italian newspaper ‘Il Messaggero’ that claimed Renault’s largest shareholder, the French government, was exploring a merger between the two groups.

Brands in the Stellantis stable include Peugeot, Citroen, DS, Alfa Romeo, Fiat, Abarth, Jeep, Lancia, Maserati, Opel, Vauxhall, Chrysler, RAM and Dodge.

By joining forces, experts within the government think that the Stellantis-Renault group would be able to strengthen its grip on Europe and be better positioned to fend off new Chinese opposition while eroding its German rivals’ market share.

Renault shares rocketed by four per cent following the merger speculation and still gained a further one per cent in its value after Elkann’s comments, suggesting investors believed the rumours to be credible.

Obstacles in the way of such a merger include antitrust issues as well as the danger of factory closures across France once the new group begins to unearth cost savings.

Last week, Stellantis CEO Carlos Tavares sparked rumours a merger was in the works when he told Italian media that the unstoppable rise of the Chinese car industry, the EU’s efforts to phase out combustion engines and issues with unions were all factors that fuelled great potential for both mergers and acquisitions.

Tavares also signalled to antitrust authorities that they must consider all of the above when deciding whether or not to approve major mergers, implying that they should employ more leniency.

Announcing Stellantis was gearing up for an era of “auto industry consolidation”, Tavares added that he thought that the rush to produce more affordable EVs would end in a “bloodbath”.

In the past, Tavares has reportedly said that Renault was a company vulnerable to a merger or acquisition, but also didn’t rule out possible interest in other car-makers.

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