State Participation Agency: Intervention in Capitalist Operations and Strategic Sectors

Extract

[...] This type of legislation is far from being limited to France. In the United States, for example, the Williams Act has strongly regulated the merger-acquisition process since 1968. More recently, the American legislator voted an emergency law in 2006 to prevent the takeover of certain American ports by the Dubai Ports World company, in the name of security and the sensitivity of port activities29. Similarly, within the countries of the European Union, significant differences are observed in the transposition of the European directive on takeovers. [...]

[...] In addition, the State can intervene to prevent a capitalist operation that could lead to the transfer of cutting-edge technology and therefore strategic to another country. This is particularly the case for the State that has funded the research and development necessary for an innovation, to be able to capitalize on this initial investment, before this technology is used by other countries. Even in the case where R&D is not directly funded by the State, it may have an interest in ensuring that domestic companies retain the monopoly on the technology that arises from it. [...]

[...] For others, on the contrary, state intervention in capitalist operations is justified, as it not only protects sensitive sectors of the economy, but also because the state has a genuine role to play as a shareholder. We will here study the impact of state intervention on capitalist operations. To this end, we will first analyze how the state participates directly in capitalism through participations in companies, describing in particular the tools at its disposal. We will then see that the state sometimes intervenes in capitalist operations under the direct pressure of civil society and public opinion. [...]

[...] The State Participation Agency focuses primarily on three types of companies: Firstly, those operating in sectors considered strategic for the country's sovereignty, such as defense companies; secondly, those performing public service missions that could not be ensured by fully private equity companies due to a lack of profitability; and finally, those threatened with disappearance and whose failure could have serious consequences for the country's economic stability or employment. Among the 88 companies included in the portfolio managed by the State Participation Agency are listed on the stock exchange8. As of October the stock market value of the state's participation in these listed companies was approximately ?71 billion9. 1.2. The tools at the state's disposal Very concretely, the State has several types of instruments to intervene in participations. The golden shares, sometimes referred to as 'reference shares' or 'specific shares', constitute one of the oldest. [...]

[...] He can also collect first-hand information about the company's performance and transmit it to the relevant ministries. According to the website of the State Participation Agency, nearly 700 directors currently in office have been appointed to represent the French state on the boards of directors (all functions within the board of directors are combined)14. Notably, the State has the possibility of appointing a commissioner in any company operating in particularly sensitive sectors, such as armaments or defense. 1.3. The role of civil society in privatization decision-making For many years, civil society has been called upon to play an important role in privatization decisions, most often to oppose them. [...]