THE IMPACT OF STATE INVOLVEMENT ON CORPORATE PROFITABILITY: A CASE STUDY OF THE STELLANTIS MERGER

Abstract

This thesis explores the dynamics of M&As, with a particular focus on cross-border mergers and acquisitions involving State-Owned Enterprises (SOEs). Is then presented a comprehensive case study of the Stellantis merger, exploring the merger process, market reactions, and stakeholder responses, while also providing a comparative analysis of Stellantis’ economic performance relative to its competitors through a multiples evaluation. The analysis extends to the significant role of state involvement in the merger, particularly examining the financial interventions of the French, Italian, and American governments, and the subsequent socio-economic challenges such as the closure of production sites in various countries. This thesis concludes that while state ownership provided stability and support during the Stellantis M&A and economic downturns, it also introduced governance complexities and inefficiencies that impacted the company's economic and stock market performance. The multiples analysis of Stellantis relative to its competitors revealed that, despite demonstrating solid financial fundamentals, the company's stock market valuation underperformed due to the multi-state ownership structure and market concerns about the company's adaption to industry shifts to electric vehicles. However, the thesis also suggests that Stellantis' undervaluation presents significant potential for long-term growth, particularly as macroeconomic conditions are improving.