The French government has bought a further 2.85% stake in STMicroelectronics, Europe’s largest chipmaker, for approximately €260 million. The deal ups France’s ownership in the French-Italian firm to 13.75%. Reports state the move will re-establish the balance of power between French and Italian shareholders: Italy’s aerospace and defence supplier Finmeccanica, which sold the shares, and state-controlled lender Cassa Depositi e Prestiti together hold a 13.7% stake. STMicro was created in 1987 by the merger of two state-owned chipmakers, Italy’s SGS Microelettronica and France’s Thomson Semiconducteurs. The Geneva-based company’s shares have dropped by more than 40% since last April. They rose 3.8% following the deal, bringing its market value to around €7.9 billion.
Meanwhile earlier this week a spokesman for the French government denied it is planning to enter into French-U.S. telecommunications equipment company Alcatel-Lucent’s capital, contrary to press reports. “These are pure speculations, I deny them most formally,” government spokesman Laurent Wauquiez said at a press conference. Earlier, the French finance ministry also said the French government doesn’t intend to buy a stake in Alcatel-Lucent. French weekly Challenges had reported on its website that French President Nicolas Sarkozy “could make a major announcement” March 3 regarding Alcatel-Lucent, citing a source close to the French finance ministry.