France digs in as Peugeot shareholder with stake shift

PARIS — France’s state holdings agency sold its stake in car maker PSA Group to the Bpifrance sovereign wealth fund, the government said on Monday, in a move signaling the government’s intention to remain a shareholder for years to come.

The Agence des Participations de l’Etat ( APE) agreed to sell its 12.7% PSA stake for €1.92 billion ($2.1 billion), more than twice the €800 million it had paid during a 2014 bailout for the maker of Peugeot and Citroen cars.

In a joint statement, the two state bodies said France would retain its two voting board seats and reclaim its statutory double voting rights two years after the change of ownership.

“Through Bpifrance, the public sector will remain a major shareholder,” they said.

The transaction will take effect after PSA’s annual shareholder meeting on May 10, which is expected to approve the French car maker’s acquisition of Opel from General Motors, announced earlier this month.

The value of the APE’s portfolio, heavily exposed to sagging energy stocks, has fallen by more than half in the last decade, challenging new investment plans including the imminent recapitalization of power giant EDF and near-bankrupt nuclear firm Areva.

The rare gains from the PSA sale will “strengthen the special purpose account ... and thereby finance state shareholder investments,” the statement said.

The state’s role as a major shareholder in both PSA and competitor Renault has been a source of friction between the government and Renault Chief Executive Carlos Ghosn.

In a scathing Jan. 25 submission to France’s Court of Auditors, Renault said the government had exhibited “conflicts of interest” and increased its stake from an “insider position” with privileged access to information.

After APE Chief Martin Vial protested publicly, Ghosn pledged on Feb. 10 to reexamine Renault’s submission, but the car maker has yet to announce a retraction or any other conclusion of that process. —