[October 25, Reuters]- Stellantis NV (STLAM.MI) is electric vehicle company Zhejiang Leap Motor<9863.HK>A source familiar with the matter said on Wednesday that the company is close to reaching an agreement to acquire shares in the company. We will provide important updates on Thursday.
Earlier Wednesday, Bloomberg reported that Stellantis was close to agreeing to buy a roughly 20% stake in Leap Motor.
Bloomberg reports that Stellantis and Leap Motor are also in talks to form a joint venture as part of the deal, which could allow Stellantis to manufacture and sell some Leap Motor vehicles outside of China. he added.
According to Bloomberg, the partnership will give Stellantis access to the EV maker’s parts and certain technology.
Stellantis, which owns brands such as Fiat and Peugeot, has a very small presence in China, the world’s largest car market. The group and rivals such as Renault (RENA.PA) are worried about increasing competition from cheap Chinese electric cars in Europe.
Stellantis said in a statement that it had previously announced that it was “considering scenarios to seize business opportunities related to the trends of Chinese manufacturers against the backdrop of the electrification of the global automotive market.” He did not elaborate.
The company on Wednesday sent out an invitation to journalists to present “important updates” on Thursday morning, without providing further details.
Leap Motor, which has a market value of about HK$42 billion ($5.4 billion), declined to comment. The company’s stock price has increased about 22% this year.
Stellantis is scheduled to report third-quarter sales next Tuesday.
A year ago, the group announced it would close a joint venture that builds Jeeps in China with local partner Guangzhou Automobile Group (601238.SS) following disappointing results.
Leap Motor announced last week that its third quarter gross profit turned positive, even though the industry has been hit by price competition this year. This is a first for a new company.
This is a goal the company has been striving for this year, primarily to improve its valuation in hopes of raising more capital, the people said.
(1 dollar = 7.8215 Hong Kong dollars)
Reporting by Akanksha Khushi in Bengaluru, Gilles Guillaume in Paris and Giulio Piovaccari in Milan. Additional reporting by Zhang Yan in Shanghai. Written by Keith Weir and Silvia Aloisi. Edited by: Shilpi Majumdar, Shweta Agarwal, Mike Harrison, Jan Harvey, David Gregorio
Our standards: Thomson Reuters Trust Principles.