PARIS--France tightened its grip on auto maker Renault SA on
Thursday, successfully blocking a shareholder resolution that would
have stopped it from gaining double voting rights in the company,
the latest move by the state to assert itself in the affairs of
corporate France.
The debate over double-voting rights pitted French Economy
Minister Emmanuel Macron against Renault Chief Executive Carlos
Ghosn, backed by the company's board of directors. The feud spilled
into public view over the past month, with Mr. Ghosn saying the
government's demands for more influence would upset the balance in
its alliance with Nissan Motor Co.
But Mr. Macron emerged victorious at Renault's annual
shareholders' meeting in Paris. The resolution, which sought to
keep the current one-share, one-vote system, required a two-thirds
majority by Renault shareholders to pass. The resolution failed the
threshold, getting just 60.5% of votes cast.
Just minutes before the beginning of the annual meeting on
Thursday, Renault's board blasted the government, saying a new
French law that mandates double-voting rights for longtime
shareholders risks undermining the company's alliance with Nissan
by giving the French state too much influence in Renault's
affairs.
"Nissan has made it known that this would disturb the balance of
the alliance," Renault's board said in the statement.
German car maker Daimler, which owns a 3.1% stake in Renault,
also voiced opposition to double-voting rights.
Renault's board added that a "very large majority" of its
members had supported the resolution, but acknowledged that the
French government's temporary purchase of new Renault shares this
month has "strongly reduced the probability" that the resolution
will attract the two-thirds majority it needs to be adopted.
The debate over double-voting rights spilled into public view
over the past month, with Mr. Ghosn saying the government is
threatening the Renault-Nissan alliance, while Mr. Macron said he
is defending a model of "responsible capitalism" that gives more
power to long-term shareholders.
Nissan, which has been in an alliance with Renault since 1999,
owns a 15% stake in Renault but without voting rights. The French
government has purchased 4.5% of Renault in the last month to boost
its stake to nearly 20%.
The government's increased vote in Renault is the latest of
several incursions by Mr. Macron into French corporate life.
Earlier in April, his ministry was instrumental in greenlighting
the largest telecom deal of the year that saw Finnish Nokia Corp.
take over Alcatel-Lucent for EUR15.6 billion ($16.6 billion). Mr.
Macron also intervened to steer the EUR217 million sale of a
controlling stake in online video site Dailymotion toward Vivendi
SA when seller Orange SA was planning to enter exclusive talks with
Hong Kong telecom company PCCW Ltd.
In the case of Renault, the French government spent EUR1.23
billion to raise its stake in Renault and secure itself enough
votes to almost certainly block the resolution. The French state
said it would sell the extra shares in the months following the
shareholders' meeting and has bought options with its broker,
Deutsche Bank, to do so.
Publicly, the French state maintained it was protecting its
rights as a shareholder and wanted to remain a major voice in how
the company's future would be handled.
But behind closed doors at board meetings, state representatives
fretted about the "Nissanization" of the company, according to
those familiar with the matter. In 2014, Renault agreed to a plan
with its alliance partner to merge many functions, including
engineering and production.
While Nissan produces almost twice as many cars as Renault, it
has far less influence in the alliance. Renault owns 43.4% of
Nissan, a stake that dates back to 1999, when the French company
gave the Japanese firm a capital injection to save it from
bankruptcy.
Renault and the government debated for months over how to deal
with the new law that doubles voting rights for investors who own
shares for longer than two years. But the two failed to come to a
compromise.
Mr. Ghosn initially had the board introduce the resolution to
block the law. Mr. Macron responded by trying to convince Mr. Ghosn
to withdraw the measure, saying that the government would allow for
a cap on the state's holdings on Renault as long as it obtained
double-voting rights, according to people familiar with the matter.
But Mr. Ghosn refused.
It was only then, some of the people added, that the government
began its share-buying gambit ahead of Thursday's meeting.
Write to Jason Chow at jason.chow@wsj.com
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