France Gets Its Way in Vote Over Renault Control

As expected, France's socialist government was successful on Thursday in forcing Renault SA to comply with a year-old law that gives double voting rights to investors who have held shares in the company for more than two years.

Renault's board had urged shareholders to retain the company's "one-share, one-vote" standard. But the proposal fell five percentage points short of the two-thirds majority required to sidestep the so-called Florange law.

The French government ensured the defeat by using options over the past few weeks to temporarily boost its stake in Renault from 15% to 19.7%. "We are not interventionist," declared Economy Minister Emmanuel Macron. "But the state will not be a powerless shareholder."

The victory hikes the government's voting stake to 28%, giving it considerable clout in defending the company against foreign takeover and guiding its decisions about employment in France.

The government's position won support from French unions. They worry that Renault's alliance with Nissan Motor Co. now favors the Japanese company. Renault holds a 43% voting stake in Nissan, which last year contributed more than 80% of Renault's net income. Nissan owns 15% of Renault but has no voting rights.