FRANCE has always been proud of its corporate champions. But these are worrying times. Only one French firm is in the global top 50 by market value. The country’s stockmarket is just 3% of the world’s total, down from 5% a decade ago.
An American activist fund, PSAM, has just mauled Vivendi, a media firm. Flagging Gallic contenders, among them Alstom (engineering), Alcatel (telecoms) and Lafarge (cement), are being bought by foreigners. The Chinese are coming. Peugeot has sold a stake to Dongfeng, a carmaker from Wuhan that doubtless hopes to take control eventually. Club Med, a holiday firm managed by the son of a French president, is now in the hands of a billionaire who began by selling bread in Shanghai.
Enter, stage left, the French government, which has legislated to strong-arm firms to give souped-up voting rights to loyal shareholders. It reckons this will protect firms from speculators and raiders, and allow them to punch above their weight. The idea has plenty of support across Europe. In reality, it will do more harm than good.
A revolutionary idea
The “Florange law” was passed in 2014 and will...
from The Economist: Leaders http://ift.tt/1IrQuwp
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