Finance:Golden share

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Short description: Nominal share which is able to outvote all other shares in certain specified circumstances

In business and finance, a golden share is a type of share of stock that lets its owner outvote all other shareholders in certain circumstances. Golden shares often belong to the government when a government-owned company is undergoing the process of privatization and transformation into a stock-company.

Purpose

This share gives the government organization, or other shareholder, the right of decisive vote in a shareholder meeting. Usually this will be implemented through clauses in a company's articles of association, and will be designed to prevent stake-building above a certain percentage ownership level, or to give a government, or other shareholder, veto powers over any major corporate action, such as the sale of a major asset or subsidiary or of the company as a whole.[1]

In the context of government-owned golden shares, this share is usually reserved for companies whose business is deemed to be of ongoing importance to national interests, for example for reasons of national security.[1]

History

The term arose in the 1980s when the British government retained golden shares in companies it privatised, an approach later taken in many other European countries, as well as the former Soviet Union.[citation needed] It was introduced in Russia by a Decree of the President of the Russian Federation (Boris Yeltsin) on November 16, 1992.[2]

As of 2014, NATS Holdings, the UK's main air navigation service provider, is an example of a company with a golden share.[3]

The government of Brazil has been holding a golden share in aircraft manufacturer Embraer[4] to retain veto power over "strategic decisions involving military programs and any change in its controlling interest."[5][6]

The June 2025 acquisition of U.S. Steel by Nippon Steel involved the use of a golden share, giving the US federal government extensive control over the company.[7][8] In January of that year, President Joe Biden had blocked the deal, citing national security concerns.[9][10] The president of the United Steelworkers union called the golden share "a startling degree of personal power over a corporation".[11]

People's Republic of China

In 2013, the People's Republic of China introduced golden shares termed "special management shares".[12][13][14] Since then, golden shares have been utilized by Chinese Communist Party (CCP) general secretary Xi Jinping's administration to expand control over private companies, particularly technology companies.[12][15][16] Golden shares have featured prominently in the governance of digital platforms, which accepted this arrangement in exchange for journalism licenses required for their daily operations.[14] During the 2020–2021 Xi Jinping administration reform spree, the government used strategic share acquisitions to increase its golden share holdings.[17]: 275 In 2021, The Economist and Reuters described the Chinese government's stake in ByteDance as a golden share investment.[18][19]

The British government's golden share in BAA, the UK airports authority, was ruled illegal by European courts in 2003, when it was deemed contradictory to the principle of free circulation of capital within the European Union.[20] The European Court of Justice also held that Portugal's holding of golden shares in Energias de Portugal is contrary to European Union law since it presented an unjustified restriction on free movement of capital.[21]

Other golden shares ruled illegal include the Spanish government's golden shares in Telefónica, Repsol YPF, Endesa, Argentaria and Tabacalera.

The golden share structure of Volkswagen AG and the travails of the German Land (federal state) of Niedersachsen (Lower Saxony) are discussed by Johannes Adolff[22] as well by as Peer Zumbansen and Daniel Saam.[23]

References

  1. ↑ 1.0 1.1 Dhir, Rajeev (October 6, 2025). "Understanding Golden Shares: Key Benefits and Real-World Examples" (in en). https://www.investopedia.com/terms/g/goldenshare.asp. 
  2. ↑ Tatyana A. Tchilimova, Anna I. Serebrennikova, Irina A. Sofronova (January 18, 2020). "Golden Share as a Tool of Corporate Strategic Management of the State". Advances in Economics, Business and Management Research 114: 525–7. doi:10.2991/aebmr.k.200114.122. ISBN 978-94-6252-887-1. https://www.atlantis-press.com/proceedings/ficehs-19. Retrieved 7 February 2024. 
  3. ↑ "Our Ownership". NATS Holdings. http://www.nats.aero/about-us/what-we-do/our-ownership-2/. 
  4. ↑ Haynes, Brad; Boadle, Anthony (2018-01-18). "Exclusive: Boeing willing to preserve Brazil's 'golden share' in Embraer deal". Reuters. https://www.reuters.com/article/world/exclusive-boeing-willing-to-preserve-brazils-golden-share-in-embraer-deal-idUSKBN1F72XU/. 
  5. ↑ "Golden Share" (in en-US). https://ri.embraer.com.br/en/governance/golden-share/. 
  6. ↑ "Bylaws of Embraer". https://www.sec.gov/Archives/edgar/data/1355444/000119312511101384/dex11.htm. 
  7. ↑ Swanson, Ana; Hirsch, Lauren (2025-06-15). "'Golden Share' in U.S. Steel Gives Trump Extraordinary Control" (in en-US). The New York Times. ISSN 0362-4331. https://www.nytimes.com/2025/06/15/us/politics/golden-share-us-steel-nippon-trump.html. 
  8. ↑ Levy, Marc (18 June 2025). "Nippon Steel finalizes $15B takeover of US Steel after sealing national security agreement" (in en). AP News. https://apnews.com/article/trump-us-steel-nippon-steel-golden-share-0bda2cf3c6de313206b481be0baf78cb. 
  9. ↑ "Regarding the Proposed Acquisition of United States Steel Corporation by Nippon Steel Corporation" (in en). 2025-01-13. https://www.federalregister.gov/documents/2025/01/13/2025-00621/regarding-the-proposed-acquisition-of-united-states-steel-corporation-by-nippon-steel-corporation. 
  10. ↑ "Joe Biden blocks Japan's Nippon Steel from buying US Steel" (in en-GB). 2025-01-04. https://www.bbc.com/news/articles/cx2vz83pg9eo. 
  11. ↑ Connor Hart and Bob Tita. "Nippon Steel Completes Purchase of U.S. Steel After Reaching Security Deal With Trump Administration" (in en-US). https://www.wsj.com/business/nippon-steel-finalizes-purchase-of-u-s-steel-after-reaching-security-deal-with-trump-administration-5d012a2e. 
  12. ↑ 12.0 12.1 Wei, Lingling (March 8, 2023). "China's New Way to Control Its Biggest Companies: Golden Shares" (in en-US). https://www.wsj.com/articles/xi-jinpings-subtle-strategy-to-control-chinas-biggest-companies-ad001a63. 
  13. ↑ Pearson, Margaret; Rithmire, Meg; Tsai, Kellee S. (2021-09-01). "Party-State Capitalism in China" (in en). Current History 120 (827): 207–213. doi:10.1525/curh.2021.120.827.207. ISSN 0011-3530. 
  14. ↑ 14.0 14.1 Wu, Angela Xiao (2025-09-01). "Golden shares in Chinese platforms: The state as news licensor and minority shareholder" (in EN). Platforms & Society 2. doi:10.1177/29768624251358685. ISSN 2976-8624. 
  15. ↑ "Xi Jinping's grip on Chinese enterprise gets uncomfortably tight". The Economist. November 26, 2023. ISSN 0013-0613. https://www.economist.com/business/2023/11/26/xi-jinpings-grip-on-chinese-enterprise-gets-uncomfortably-tight. "State investors have also been taking "golden shares", tiny stakes that grant outsized voting powers, in China's internet giants. In October it was revealed that a government agency had taken a 1% stake in a subsidiary belonging to Tencent, China's mightiest internet titan." 
  16. ↑ McGregor, Grady (April 2, 2023). "Golden Grip". The Wire China. https://www.thewirechina.com/2023/04/02/golden-grip-golden-shares/. 
  17. ↑ Zhang, Angela Huyue (2024). High Wire: How China Regulates Big Tech and Governs Its Economy. Oxford University Press. doi:10.1093/oso/9780197682258.001.0001. ISBN 978-0-19-768225-8. 
  18. ↑ "China's communist authorities are tightening their grip on the private sector". The Economist. 2021-11-18. ISSN 0013-0613. https://www.economist.com/business/chinas-communist-authorities-reinvent-state-capitalism/21806311. 
  19. ↑ "Fretting about data security, China's government expands its use of 'golden shares'" (in en). Reuters. 2021-12-15. https://www.reuters.com/article/china-regulation-data-idCAKBN2IU2B7. 
  20. ↑ "Business | BAA 'golden share' ruled illegal". BBC News. 2003-05-13. https://news.bbc.co.uk/2/hi/business/3022809.stm. 
  21. ↑ "Portugal's holding of golden shares in Energias de Portugal is contrary to European Union law". http://curia.europa.eu/jcms/upload/docs/application/pdf/2010-11/cp100112en.pdf. 
  22. ↑ Adolff, Johannes (1 August 2002). "Turn of the Tide? The 'Golden Share' Judgments of the European Court of Justice and Liberalization of the European Capital Markets". German Law Journal 3 (8). doi:10.1017/S2071832200015273. http://www.germanlawjournal.com/article.php?id%3D170. Retrieved January 24, 2008. 
  23. ↑ Zumbansen, Peer C; Saam, Daniel (November 15, 2007). "The ECJ, Volkswagen and European Corporate Law: Reshaping the European Varieties of Capitalism". German Law Journal 7 (11): 1027–1051. doi:10.1017/S2071832200006167. http://www.germanlawjournal.de/print.php?id%3D870. Retrieved January 24, 2008. 



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