France Boosts Stake in Renault

The French government is temporarily raising its holdings in Renault SA to 19.7% from 15% in a bid to influence future shareholder voting rights, Reuters reports.

Renault has urged shareholders when they meet on April 30 to adopt the company's "one-share, one-vote" proposal by a two-thirds majority. Doing so would absolve Renault from granting double voting rights to longer-term shareholders including the government as otherwise required by the country's new "Florange" law.

The government wants to block the exemption, thereby gaining more clout in shaping major policy decisions, especially those affecting employment in France.

The government has pledged to reduce its Renault holdings to 15% after the shareholder vote. Economy Minister Emmanuel Macron says France wants to "promote the progressive, long-term kind of capitalism that supports workers and helps companies grow."

But a senior Reuters source at Renault says the government's power grab could have the opposite effect on the company's highly successful alliance with Nissan Motor Co.

Renault holds a 43% voting stake in Nissan. Nissan's 15% stake in Renault does not include voting rights. Reuters' source says Nissan has been unhappy with its lack of clout and is likely to bridle at the prospect of even heavier government influence.