Print Edition - 2019-02-28 | MONEY
Air France-KLM shares slump
Feb 28, 2019-
Shares in Air France-KLM fell sharply on Wednesday after the Dutch government said it would take a 14 percent stake in the airline, highlighting tensions between France and the Netherlands over control of the company.Air France-KLM shares were down by 11 percent by 0855 GMT which analysts said reflected worries that governments’ competing interests may run contrary to those of investors.
“Air France-KLM risks becoming a political football between two governments,” Liberum analysts said in a note.
Late on Tuesday, Dutch Finance Minister Wopke Hoekstra announced the Netherlands had taken a 12.7 percent stake for 680 million euros ($774 million) and aimed to increase that to about 14 percent, to counterbalance the French government’s stake in the group.
The move, which took the French by surprise, came weeks after a confrontation between the Dutch government and the company’s French-dominated executive board over waning Dutch influence.
Although Air France and KLM merged back in 2003, the KLM subsidiary has always maintained an independent corporate structure within the group.
With the backing of the Dutch government, the KLM subsidiary has balked at attempts by Air France-KLM group’s new Canadian CEO Ben Smith to move toward deeper integration.
Published: 28-02-2019 13:04