Jose Altoveros / Renault | November 08, 2017 08:32
French government reduces stake in Renault, automaker buys back shares
The French government has recently eased control on local automaker Renault by selling $1.4 billion worth of shares, according to a report by Bloomberg. Specifically, they sold a 4.7 percent stake in the manufacturer, which was then bought back by Renault as part of the the transaction. Renault then plans to offer the shares to employees, in order to give them a say in how the company is run.
Now, the French government only owns 15 percent of their largest domestic automaker. However, they still remain as Renault's largest shareholder ahead of Nissan, but now by only a small margin. According to Bloomberg, the French government purchased the additional 4.7 percent of shares back in April 2015 to thwart Nissan gaining a say in the French company. Being successful, France gained special voting rights in the alliance, giving it more say compared to its Japanese ally.
The sale of Renault shares is said to have resulted in more than 55 million Euros for the nation. This is due to the strong stock market value of the automaker, which has conitnually risen in the past months. Despite the sale, government agreements remain which include capping France's voting rightsto 17.9 percent.
Currently, Renault is valued at £22.6 billion and plans to continue their increaseing their market value. This will be done by boosting operations and sales of vehicles globally.
Furthermore, Nissan would likely also benefit from this as they are now at almost equal level of shares with France. No longer will the French government have a larger say in the company, but rather be at an almost equal footing.