Dairy company Granarolo, backed by Banca Intesa, is considering takeover offer for bankrupt rival Parmalat worth up to €2bn (US$2.4bn), according to the Reuters news agency, which quoted ‘a source familiar with the deal.’
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Unlisted Granarolo has in the past expressed an interest in Parmalat, which sank into insolvency in December 2003 in a multi-billion euro financial scandal. Chairman Luciano Sita has held talks with government ministers on the issue.
Italian newspaper Il Messaggero reported on Wednesday that negotiations between executives at Intesa and Granarolo were narrowing in on the outlines of a bid. Intesa has already contacted Parmalat creditors who will become shareholders after a planned debt-for-equity swap, the paper said.
The source said details of the offer would be ironed out over the coming months as Parmalat prepares to return to the stock market after carrying out the debt swap.
“The deal is being worked out,” the source said, adding that reports of an all-share offer for Parmalat worth between €1.8bn and €2bn were “reasonable.”
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By GlobalData“The main obstacles in terms of valuation have been worked out but we still need two more months,” the source added.
Italy’s antitrust body said it would study the distribution of products in the case of a merger.
“We should check there is no territorial overlap of brands,” a spokesman for the antitrust body said, adding the regulator had not received any notification of a possible deal.
Granarolo is only a fraction of Parmalat’s size. In 2004, the group registered sales worth €852m, against Parmalat’s core revenues of almost €3.7bn.
It employs about 1,300 people, while Parmalat employed some 32,000 people worldwide at the time of its collapse and now aims to cut that to below 17,000.
