France fumes as Dutch government takes stake in Air France-KLM
A minor diplomatic row appears to be building after the Dutch government snapped up a near-13% stake in Air France-KLM, prompting the French government to accuse The Hague of acting like an “unfriendly” corporate raider.
The Dutch finance minister said the Netherlands had spent €680m (£581m) on a 12.7% stake in the company, which was formed in 2004 when the two flagcarrier airlines merged.
The Netherlands said it was prepared to increase its stake to 14% to ensure it can bring Dutch influence to bear on the company, putting it on an even keel with France, which already holds about 14%.
“Buying this stake ensures we have a seat at the table,” said the Dutch finance minister, Wopke Hoekstra, indicating a desire to have more influence over Dutch economic interests and jobs, and the status of Schipol airport, in Amsterdam. Schipol is continental Europe’s second busiest airport, after Charles de Gaulle in Paris.
French president Emmanuel Macron urged the Dutch government to “clarify its intentions” while his finance minister Bruno Le Maire described the Dutch move as “incomprehensible.” Le Maire said the business should be “managed without national public interference”.
French officials said they were upset that they had not been informed in advance of the Dutch stake-building plans.
Local media reports said the the government in Paris was only informed of the share purchase an hour before it was officially confirmed. “The way that the stake was built up was more like that done by a corporate raider, rather than a state shareholder,” a French finance ministry official told Reuters.
The official added that the purchase was an “unfriendly, surprising move that is extremely detrimental to Air France-KLM financially”.
The source declined to say whether the French state would raise its stake in reaction to the Dutch move but said Paris was going to ask France’s financial markets watchdog to examine heavy trading in the airline’s shares prior to the Dutch government’s announcement. Le Maire will meet Hoekstra later this week to discuss the airline.
Shares in Air France-KLM were down by 15% at one point, in the wake of the disclosure of the investment by the Netherlands, prompting the French official to point out that Dutch taxpayers had already seen the value of their investment plummet. They closed down 12%, at €11.24, valuing the airline at €4.82bn, as analysts voiced concerns that the two government’s competing interests could have an impact on the carrier’s strategy and growth.
The row comes amid reports that the Dutch government had waded into discussions about the future of KLM’s chief executive, Pieter Elbers, amid doubts over whether he would keep his job.
Elbers was said to be sceptical about plans by the company’s overall boss, Canadian Ben Smith, to further cement ties between the two airlines, which operate as separate carriers under one holding company.
KLM is the more profitable of the two airlines.
The French budget minister Gérald
Darmanin called on states to interfere in the alliance as little as possible.
“We must have good relations with our friends from the Netherlands,” Darmanin told Europe 1 radio.
“It is especially necessary that the states are involved as little as possible in the running of a large company like this. We must let the people of Air France-KLM work.”