A couple of years ago, the French government increased its stake in Renault to 19.73 percent, boosting its influence and secure double voting rights for longer-term investors – itself included – in an alleged attempt to block a resolution that could’ve reduced its control over the company.
At the time, many viewed it as a challenge aimed squarely at Chief Executive Carlos Ghosn and decried the use of the company as a political football. Today, the French government sold 14 million Renault shares, cutting its stake back to 15 percent.
President Emmanuel Macron, who spearheaded the purchase as economy minister two years ago, is selling the shares as promised. The government had acquired the shares as it sought to thwart an effort by Nissan Motor Co. to gain a say in its French partner. Head honcho Ghosn opposed the move at the time.
Even with the sale of these shares, France remains the company’s largest shareholder, at 15.01 percent, just narrowly ahead of Nissan. The entire deal is said to be worth approximately 1.21 billion Euros (nearly $1.4 billion), or roughly the average Parisian’s daily bill for red wine and baguettes.
Basic math teaches us that if the state sold 4.7% of the company for that amount, they realized 86.60 Euros per share in the disposal. Renault, which has a stake of about 40 percent in Nissan, rose over 4 percent in early Friday morning trading on the CAC-40 index, cresting the 90 Euro mark.
The French government seems to have done well, reportedly making nearly 55 million Euros ($64 million) on the sale of these shares. Renault acquired 1.4 million, or 10 percent, of them as part of the deal, planning to offer them to employees.
Bullish on their future performance as a company, Renault released a statement saying the shares were acquired at the placement price, with a view to implementing an offer to current and former Groupe Renault employees. This will allow those people to “participate in the Groupe Renault’s performance.”
Renault-Nissan has recently embarked on a quest to double its electric vehicle offerings over the next five years and also plans to expand its presence in China. They’ve also recently shaken up their motorsport program, hauling the Renault brand out of Formula E in a presumed bid to refocus its efforts on F1. Nissan will represent the company in electric racing starting in the 2018/19 season.