Nokia/Solidium: solid state device
Other countries may wish they also had a state-owned investment company
The Germans are worried about Geely acquiring a tenth of Daimler. French incursions into corporate Italy are increasingly resented. UK lawmakers are fretting about the fate of GKN. All might wish they had a Solidium.
On Tuesday, Finland’s government-owned investment company said it had acquired an €844m stake in telecoms equipment maker Nokia to “strengthen and stabilise the domestic ownership in this nationally very important company”.
Countries that wanted to defend important companies without owning large positions in them once used “golden shares”. But these have been largely outlawed and live on only in specific cases where national security is involved. The Committee on Foreign Investment in the United States also makes decisions primarily on national security considerations — or should do.
In France, Agence des Participations de l’etat owns stakes in listed groups deemed strategically important, like Engie, EDF and Aéroports de Paris. It has not hesitated to make its presence felt, publicly criticising the pay of Renault chief Carlos Ghosn.
The danger that “strategic” could be confused with “political” is partly mitigated at Solidium by a mandate that puts investment considerations above nationalistic ones. There is no magic money tree; it had to finance the purchase of the Nokia stake by selling shares in mobile operator Telia. It has representatives on the boards of half its investee companies. In this sense it is more like Investor or Industrivarden, the holding companies controlled by Swedish families.
Solidium’s largest stake is in paper maker Stora Enso, where it has a quarter of the votes. Its initial stake in Nokia is just 3.3 per cent; other Finland-based investors own 15 per cent, according to Bloomberg.
Using state equity participation to defend companies against takeover will always be controversial. But if it is to be done, then small stakes held by an arms-length vehicle that actually makes a return is a good way to do it.