PARIS: The French state will spend as much as 1.23 billion euros ($1.3 billion) to raise its stake in Renault SA and maintain its influence in the carmaker.
The French treasury bought 9.6 million Renault shares on the market yesterday and has given a bank a mandate to acquire 4.4 million more, the Industry Ministry said in a statement Wednesday. The move will cost between 814 million euros and 1.23 billion euros and safeguard extra voting rights the government and other long-term shareholders are due to receive.
The government wants to ensure it wins a shareholder vote on April 30 that will determine whether any investor who owns the stock for more than two years can get double voting rights.
The state backs the shift, allowed in French law since 2014, which will give it and other long-term shareholders more power. France is the biggest owner of stock in Renault, followed by Japanese auto-manufacturing partner Nissan Motor Co.
“This measure is aimed at protecting the current Renault-Nissan alliance structure against shareholder activism,” said Philippe Houchois, a London-based auto analyst at UBS AG.
The state’s holding will rise to 19.7 percent of Renault and 23.2 percent of its voting rights, from 15 percent and 17.7 percent before yesterday’s purchases, ministry officials said on a conference call.
Because of its close ties to Renault, which is based in the Paris suburb of Boulougne-Billancourt, Nissan doesn’t exercise its voting rights, leaving the government with the main influence at the French company, they said.
