France ups hold­ings in Re­nault, seeks block­ing stake


The French gov­ern­ment said Wed­nes­day it is in­creas­ing its hold­ing in car­maker Re­nault to gain a block­ing mi­nor­ity stake and en­sure that mea­sures de­signed to re­ward long-term in­vestors come into force.

A law adopted last year to en­cour­age long-term in­vestors will give them dou­ble vot­ing rights at share­holder meet­ings, although share­hold­ers can vote to opt out of the sys­tem.

With some Re­nault share­hold­ers look­ing to pre­vent th­ese mea­sures from tak­ing ef­fect at the an­nual meet­ing on April 30, the fi­nance and econ­omy min­istry said Wed­nes­day it was buy­ing shares to take the state’s stake to 23.2 per­cent, up from its pre­vi­ous hold­ing of 15 per­cent.

Given Re­nault’s di­verse share­holder base and gen­er­ally low par­tic­i­pa­tion rate at share­holder meet­ings, a min­istry source said this should give it the third of votes needed to block an ef­fort to keep the dou­ble vot­ing rights mea­sure from tak­ing ef­fect.

Of­fi­cials said the move was in line with the French gov­ern­ment be­ing an ac­tivist in­vestor and pro­tect­ing the na­tion’s long-term in­ter­ests.

“This op­er­a­tion demon­strates the de­sire and ca­pac­ity of the French state to uti­lize all the tools at the dis­posal of in­vestors to pro­mote cap­i­tal­ism and progress in the long term in the in­ter­ests of em­ploy­ees and the devel­op­ment of com­pa­nies,” said Econ­omy Min­is­ter Em­manuel Macron in a state­ment.

“This op­er­a­tion shows that the French state is at the same time a shrewd in­vestor and a de­fender of the public in­ter­est.”

The French state has not shied away from pro­tect­ing com­pa­nies it views as strate­gic, re­cently see­ing off at­tempts by Ya­hoo! and a Hong Kong tele­coms gi­ant to buy a stake in the video-shar­ing site Dai­lymo­tion.

It was also deeply in­volved last year in the split-up of rail and en­ergy equip­ment man­u­fac­turer Al­stom, even­tu­ally choos­ing a 12.4-bil­lion-euro (US$13.5 bil­lion) of­fer from GE over Siemens af­ter ob­tain­ing bet­ter terms con­cern­ing the nu­clear, steam tur­bine, off­shore wind and hy­dro power busi­nesses.

The fi­nance and econ­omy min­istry said it had al­ready ac­quired 9.56 mil­lion Re­nault shares and would buy an­other 4.44 mil­lion at a cost of up to 1.2 bil­lion eu­ros.

Prac­tice Al­ready Wide­spread

The Flo­r­ange law adopted last year extends the prac­tice of re­ward­ing in­vestors who hold their shares for longer than two years by giv­ing them dou­ble vot­ing rights, a prac­tice that the min­istry said is al­ready in ef­fect at more than half of the com­pa­nies listed on the Paris stock ex­change’s bluechip CAC-40 in­dex.

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