In a rather surprising move, the French state recently opted to boost its holding in Renault, lifting its influence as the automaker’s largest shareholder and rising to challenge its chief executive officer Carlos Ghosn.
According to a Wednesday announcement by the finance ministry, the French state will increase its stake in Renault from 15 percent to 19.7 percent – already having most of the additional shares needed. The government has moved to increase its stake in a drive to be sure that double voting rights would be achieved for the longer-term investors – France included. “It seems that Renault is being used as a political football,” commented one analyst with Evercore ISI, with the intervention going against the company’s strategy. Socialist President Francois Hollande introduced a bill – the so-called Florange law – in which long-term shareholders in French firms would be granted double voting rights, unless they specifically opt out by a needed two-thirds majority.
Renault has moved to initiate a “one-share, one-vote” proposal to dismiss the Florange law influence and the government’s move to dismiss it would equate to public bid against chief executive officer Carlos Ghosn, who led both Renault and alliance partner Nissan for the past ten years. “We do not envisage holding that many (shares) in the long term,” commented today Economy Minister Emmanuel Macron for RTL radio. Now, after the April 30 annual general shareholder meeting, analysts and industry observers are waiting to see the potential destabilizing influence of the governmental move on the alliance’s future.