The Florange law has the effect of automatically doubling one's voting rights of a French issuer's shares when they are held for two years or more.
You may remember our blog post from 2016 where we first spoke about The Florange Law, and how it impacted the voting rights of shareholders. The Florange Law created an automatic regime whereby, effective March 31 2016, shareholders who have held shares for two years within a French company, listed on a regulated market, were automatically awarded with double voting rights, unless it had been specifically prohibited in the by-laws of the company.
The Florange Law was sparked by the events that followed the hostile takeover of Arcelor, by the Indian company Mittal, forming the steel production company ArcelorMittal. In 2012, ArcelorMittal announced that they would close two blast furnaces in Florange (Lorraine, France), which led to a public outcry and a promise from president François Hollande to strengthen the rights of workers in takeover situations. Two years later, Florange Law was passed, allowing the Board, facing a potential takeover, to thwart a takeover without shareholder’s approval.
While there haven’t been any major updates to the Florange Law recently, there has been an exciting update here at FundApps - which is that we are now able to correctly calculate the adjustment to voting rights derived from the Florange Law. Our service provides a solution to this challenge by automatically doubling the voting rights for positions (assets) of French companies, listed on a regulated market, that clients have flagged as being held for two years or more. Once the applicable positions have been flagged, our service does the rest and is able to automatically adjust the voting rights accordingly.
Interested in seeing this in action?
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