French Government Eases Grip on Renault With $1.4 Billion Sale

Khodrocar - The government sold 14 million Renault shares for 1.21 billion euros ($1.4 billion), reducing its stake back to its historical level of 15 percent, the state’s investment agency APE said. Renault acquired 1.4 million shares as part of the transaction and plans to offer them to employees, the Boulogne-Billancourt-based company said in a statement Friday.

French President Emmanuel Macron, who spearheaded the stake purchase as economy minister in April 2015, is reversing the surprise move 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. France prevailed in the spat, securing special voting rights that give it more sway in the automotive alliance than the Japanese carmaker, which generates a majority of the profit.

"This news is quite positive as it will reduce tensions” between the French government and Renault Chief Executive Officer Carlos Ghosn, who was sidelined in the stake purchase, Xavier Caroen, a Paris-based analyst at Bryan Garnier & Co. "It will obviously not resolve governance issues” as France’s remaining holding will still limit closer capital ties with Nissan.