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March 22, 2011

ITALY: Lactalis increases Parmalat stake

Lactalis today (22 March) announced it has entered an agreement to buy a further 15.3% stake in Italian dairy and food manufacturer Parmalat, increasing its shareholding to 29%.

Lactalis today (22 March) announced it has entered an agreement to buy a further 15.3% stake in Italian dairy and food manufacturer Parmalat, increasing its shareholding to 29%.

It will purchase the EUR744m (US$1.1bn) stake from international funds Zenit Asset Management AB, Skagen AS and Mackenzie Financial Corporation.

The French dairy group took an initial 11.42% stake in Parmalat through an equity-swap deal last week, with the potential to increase its stake through equity-swaps by a further 2.86%.

In the wake of that investment, Italian economy minister Giulio Tremonti presented the cabinet with the outlines of a possible legal measure to protect Italian companies from foreign buyers.

“I hope that there is an effort on the part of national companies and banks that Parmalat remains Italian,” he said.

Lactalis said the agreement will be executed today in the “quickest necessary technical timing” and could be made by direct acquisitions by Group Lactalis or as part of equity swap contracts.

Following the transaction, Group Lactalis will hold a direct and potential shareholding that combined would account for approximately 29% of Parmalat. When it took the initial 11.42% stake, Lactalis said it did not plan to break the 30% ownership threshold that would trigger a mandatory tender offer under Italian law.

There was also speculation yesterday that Ferrero might be interested in taking a stake in the manufacturer, with a spokesperson telling just-food that it is “looking with interest and sympathy at an industrial Italian solution”.

Additionally, Italian dairy group Granarolo said it was interested in joining a consortium with confectioner Ferrero to keep control of Parmalat in Italian hands.

“Our possible interest would be limited to Parmalat Italia that with sales of about EUR1bn is a similar size to Granarolo,” Granarolo chairman Gianpiero Calzolari told Italian business daily Il Sole 24 Ore.

The announcement comes despite the shareholders “strongly denying” they were in negotiations to sell their stake in the manufacturer earlier this month. The three investors signed a co-ordination agreement on 26 January to nominate a slate of 11 candidates to elect to Parmalat’s board of directors.

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