The French government wants a bigger stake in the carmaker Renault to protect provisions that reward long-term investors. Paris is looking to obtain a blocking minority before a shareholders meeting later this month.
The French government said Wednesday it would increase its stake in the carmaker Renault to nearly 20 percent to prevent other shareholders from voting to opt out of an investor protection law that was adopted last year.
It was the latest manifestation of Paris' unabashed industrial policy, one that does not shy away from direct government involvement in companies the state views as strategic.
Known as the Florange law, the measures stipulates that investors who hold onto their shares for more than two years are entitled to double voting rights at shareholder meetings. While Paris has championed the provisions as being conducive to business, some shareholders have said they intended to block them from taking effect at the company's annual meeting on April 30.
In response, the Finance and Economy Ministry said Wednesday it would acquire up to 14 million more shares in Renault, raising its stake in the company by 4.7 percent. The acquisition could cost anywhere between 814 million and 1.2 billion euros ($884.6 million and $1.3 billion).
Officials said the ministry had already obtained 9.56 million shares and would buy another 4.44 million, thus securing the government a blocking minority and allowing Paris to keep fulfilling its role as an activist investor.
"This operation shows that the French state is at the same time a shrewd investor and a defender of the public interest," Economy Minister Emmanuel Macron said in a statement.
It is not the first time Paris has stepped in to guard companies it views as strategic. It played a central role in the split up of rail and energy equipment manufacturer Alstom last year, ultimately choosing a bid from GE over Siemens, and it recently fended off attempts by Yahoo! and a Hong Kong telecoms firm from buying stakes in the online video-sharing website Dailymotion.
Renault shares were up 0.08 percent to 85.33 in early morning trading.
cjc/el (AFP, Reuters, dpa)