Lactalis threw down the gauntlet – and blew away any post-Easter cobwebs on consumer goods newsdesks in Europe – in the battle for the ownership of Italian dairy group Parmalat this morning (26 April) with a takeover bid for the entire business.
The French dairy giant already owns a near 29% stake in Parmalat, a shareholding that has prompted some concern in Italy that one of the country’s “strategic” companies could end up with foreign owners.
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In the month since Lactalis began investing in Parmalat, some Italian politicians, businesses and financial institutions have gone public with their belief that the Italian firm should stay in domestic hands. Speculation has been rife in Italy that a counter bid for Parmalat could emerge, with, at different times, reports that Italian chocolate maker Ferrero, smaller local dairy processor Granarolo and a number of banks could either invest in the company or form members of a national consortium that could launch a bid for the business.
For its part, Lactalis has stood firm, insisting it remains committed to the long-term future of Parmalat and dismissing speculation at one stage that, amid the political opposition, it could sell its shares. This morning, that commitment was made plain with a EUR3.38bn (US$4.95bn) bid for the rest of Parmalat.
So, what now? Could a rival bid – from a so-called consortium of domestic players – emerge? It remains a distinct possibility. The industrial logic of Lactalis’s move for Parmalat is clear. A stronger Italian business would be created and each company could benefit from the overseas presence of the other. Parmalat’s presence in markets like Canada, Australia and South Africa, for instance, was no doubt a key reason behind Lactalis’s initial investment.
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However, the flurry of reports and level of speculation surrounding a desire to keep Parmalat Italian-owned means a counter offer should not be ruled out. Nationalism is one reason but let’s not forget that Italian financial institutions are likely to be eyeing the level of cash remaining on Parmalat’s balance sheet with interest.
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By GlobalDataThe week ahead (well, the next three days, apparently there is a wedding going on) will see our pages begin to be filled with the latest quarterly numbers from the world’s largest food manufacturers. From the largest conglomerate down to the up-and-coming local supplier, these figures are of interest, as the likes of Hershey, Associated British Foods, PepsiCo and Premier Foods plc reveal their thoughts on the consumer environment and commodity costs.
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