Dutch government invites itself at Air France-KLM capital

Eric Salard

In an unexpected move, the Netherlands acquired 12.68% of Air France-KLM capital on February 26, 2019, for a total of €680 million euros.

The Dutch government intends to make sure the interests of KLM Royal Dutch Airlines are protected. It will now be able to influence the decisions of the group. “The goal is ultimately to obtain a position equivalent to that of the French state,” said Dutch Finance Minister Wopke Hoekstra during a press conference, adding “Acquiring this participation gives us a seat at the table.”

The French government currently holds a 14.3% stake in the group while the Dutch one only had 6% in KLM airline.

It seems that neither the French government nor the board of Air France-KLM Group was informed of the decision of their Dutch counterpart. “The way in which this position has been acquired is reminiscent of the trader rather than the state shareholder techniques, commented the French ministry of Economy and Finance, quoted by France24, adding “it is both very surprising and unfriendly with regard to the Air France Board of Directors and other shareholders who like the French State, have not been informed in advance of this decision of the Dutch State.”

French President Emmanuel Macron called onto “the Dutch government to clarify its intentions.”

An extraordinary general meeting of Air France-KLM board of directors was held on February 27, 2019. “The Board of Directors of Air France-KLM will be very vigilant about the consequences of this acquisition for the Group,” it declared in a press release, also stating that it would ensure that “this does not affect the new dynamics of the Group and its companies” driven by Benjamin Smith.

This sudden decision comes weeks after tension between the group and its Dutch airline over the future of KLM CEO Pieter Elbers, whose contract has to be renewed in April 2019. The candidacy of Elbers received the support of his board, his employees and of the Dutch finance minister. On February 22, 2019, the board finally announced that he was appointed for another four years and would even been named deputy general manager of the group.

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