Kretinsky is buying up broken France. British businesses should do the same

Kretinsky clearly does not see it that way. Last week, he agreed a €1bn (£860m) deal to take control of the loss-making IT services unit of the technology company Atos. It adds to a growing portfolio in France. 

Only last month, he won control of the ailing supermarket chain Casino in a complex deal that involved restructuring its vast debts. 

Only a few weeks before that he bought the publishing firm Editis from the media conglomerate Vivendi, and back in 2019 he took a stake in Le Monde, France’s most prestigious newspaper, to add to media interests that also include magazines such as Elle. He hasn’t managed to buy the Eiffel Tower yet, but at this rate perhaps it is only a matter of time.

In this country, we are aware of Kretinsky for his stakes in Royal Mail and Sainsbury’s, both of which may well lead to full takeovers one day, while in Germany he is known for a stake in the Metro grocery giant. But it is France that is emerging as the real focus of an intriguing pan-European empire.

It would be easy to argue that he was making a catastrophic misjudgement, and one that will end up decimating much of a fortune that was initially made in the energy industry. More plausibly, Kretinsky is on to something. France is full of opportunities – and British companies should be snapping them up.

At the top level, the French stock market has been doing perfectly well. Indeed, it has steadily outperformed most of its peers across Europe, and recently overtook London as the Continent’s largest equity market measured by total market value. 

However, that is driven by a tiny handful of companies. The luxury goods giant LVMH has become Europe’s Apple for its extraordinary ability to churn out profits, making it Europe’s first €500bn business, and it is closely matched by its two great rivals Hermes and L’Oreal.

If you strip out those three companies, their success mainly fuelled by the unstoppable Chinese appetite for high-end brands, the performance of the rest of the index is dismal. 

If you dig down into the Paris bourse to the performance of mid and small cap companies it is even worse. While the CAC-40, the major index in Paris, is up by 34pc over the last five years, the Mid 60, the mid-cap index that covers the companies outside the top tier, is down by 2pc over the same period. 

The big global companies are doing well, at least when they are selling fancy handbags. The core industrial base out in the heartlands of the economy is unloved and neglected. It has been having a rough time, struggling to make much money, and ignored by investors.