
France’s state shareholding in Renault is to revert to 15% after Paris’ decision to sell nearly 5% of its stake worth EUR1.24bn (US$1.41bn) in the automaker.
The decision by the Agence des Participations de l’Etat (APE) brings to a close a highly political move bitterly opposed by Renault in 2015, in which France dramatically upped its stake to nearly 20%, allowing shareholders of more than two years to have double votes.
At the time, Paris maintained double voting rights encouraged investors to retain shares and increase stakeholder influence, flying straight in the face of the Renault board, which vehemently argued for “one share, one vote,” as a matter of principle.
At the time, France had an enthusiastically socialist President in the guise of François Hollande and the Renault move was widely acclaimed by unions as a way to anchor the manufacturer in France, but the elevation of Emmanuel Macron to the Elysée Palace, himself Economy Minister at the time of the share increase, has seen a volte face in the situation.
“The French state announced the closing of the sale of 4.73% of the share capital of Renault, that is, 14m shares, through a placement to institutional investors by way of an accelerated book building,” said a Renault statement.
“This sale evidences the support the French state as shareholder of Renault gives to the strengthening of the Alliance and it occurs in a consolidated climate of trust among Renault and its main shareholder.
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By GlobalData“In accordance with applicable regulation, Renault has decided to acquire 10% of the shares sold by the French State (i.e., 1,400,000 Renault shares), at the placement price, with a view to implementing an offering reserved for employees and former employees of Groupe Renault, in order to allow them to participate in the Groupe Renault’s performance.”
Union reaction to the news has yet to be evaluated, but the extremely rapid rise of Macron to the presidency marks a shift in the political landscape from an unabashed leftist stance to a more centrist and less Statist position.
That shift can be gauged by a joint statement issued by the French Ministries of Economy and Finance in 2015, which hailed the share increase as: “Perfectly in line with the new doctrine of the state as shareholder,” adding for good measure: “It [doctrine] has as a goal reinforcing the weight of the State shareholder in managing the business with the intention of protecting its long term interests…and particularly of those of Renault employee shareholders.”
The move has also netted Paris a healthy profit of EUR55m, but the APE is keen to stress its still major stake in the automaker, which remains substantial for a developed western economy.
“The asset balance sheet for the state in this operation will yield a gain of more than EUR55m following the acquisition of these 14m shares in 2015,” said an APE statement.
“At the end of this investment, the state will stay the main shareholder in Renault, with 15.1% of its capital.
“The governance agreements between the state and Renault, signed in February, 2016, remain fully in force.”