French state to hang on to majority of Renault

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The Independent Online
PARIS - The French state will keep a majority shareholding in Renault, going back on an earlier decision to put the state-owned car firm up for full privatisation, Edouard Balladur, the Gaullist Prime Minister, said yesterday, writes Julian Nundy.

While Mr Balladur attributed the change in policy to industrial strategy, it looked more like a retreat so as not to anger the trade unions in the eight months leading up to the next presidential election. He said shares in the company would be sold to the public but 'the state will remain the majority shareholder'.

In a television interview, Mr Balladur said the inclusion of Renault in the list of companies to be privatised when his government came to power 18 months ago, was based on its link to Volvo of Sweden. Volvo backed out of the arrangement last year, fearing domination by the French company.

Mr Balladur said Volvo would sell off part of the 20 per cent it holds in Renault. The company is expected to be valued at between Ffr40bn ( pounds 4.8bn) and Ffr44bn.

Renault's privatisation has become an issue on the French left, and, had the government pressed ahead for full denationalisation, the measure would almost certainly have provoked strikes at a potentially embarrassing time, especially since Mr Balladur is himself a likely presidential candidate.