Dutch stun AF-KLM Group with massive share buy


The Dutch are elated, twitter has been bursting with pride, the Air France -KLM Group management in shock, and the french government just as stunned by a sudden buy up of $680m worth – nearly 13% of the shares in AF-KLM Group.

This follows a recent deep concern in the Netherlands that KLM was becoming too heavily controlled by Air France. Ben Smith the ex-Air Canada executive and now AF-KLM’s Group CEO, seemed to have issues with the CEO of KLM and might not re-appoint him as KLM CEO, so much so that the Dutch finance minister and the KLM unions came out in public support of their countryman.

The gambit seems to have paid off as the contract was renewed, but on the same day AF-KLM Group announced that it was aiming to further join its back-room operations from personnel to resource management.

That seems entirely reasonable but the cultural differences between the Dutch and the French, which go back hundreds of years (and have the Netherlands more closely aligned to the British than anyone else), went down badly in the Netherlands.

These seem to have triggered a response from the Dutch Government, which ordered the share purchase on behalf of the state, without asking or informing the AF-KLM board, or the French Government, which owns just over 14% of the group itself.

It seems that the Dutch Government intend on using their new voice in the company to restrain too much determination on the part of the French to reduce Dutch influence over the way their national airline is managed.  Its been immensely popular in Dutch aviation circles and beyond, but the reality is it probably won’t make much difference, but it will make AF-KLM Group think twice before it tries to diminish Dutch influence further.