French Lactalis says ups stake in Italy's Parmalat to 29%

22nd March 2011, Comments 0 comments

French cheese giant Lactalis said on Tuesday it had reached a deal to take its total stake in Parmalat to 29 percent despite a warning by Italy it would take measures to protect the dairy group.

Lactalis, the world's largest cheese manufacturer, said it would buy on Tuesday the 15.3 percent of the ordinary shares in Parmalat held by Zenit Asset Management AB, Skagen AS and Mackenzie Financial Corporation for 2.80 euros a share.

"At the completion of this transaction the Lactalis Group will have a direct and potential holding of around 29 percent of the capital of Parmalat," the company said in a statement in Italy at the request of the Italian stock market authority.

Trading of shares were temporarily suspended on the Milan bourse.

On Thursday, Lactalis announced it had picked up 11.42 percent of Parmalat and said it planned to increase further its stake, without reaching the 30 percent shareholding level which would oblige it to launch a full buyout.

That triggered a vociferous response from the Italian government which vowed to take measures to protect "strategic companies".

Economic Minister Giulio Tremonti talked at a cabinet meeting about "French legislation on safeguarding strategic enterprises in view to future measures by the (Italian) government," according to a government statement.

Tremonti met French Ambassador in Rome Jean-Marc de La Sabliere along with Prime Minister Silvio Berlusconi's right-hand man cabinet under-secretary Gianni Letta, a governmental source said.

During those talks, Tremonti and Letta explained to the ambassador what measures the Italian government intends to take while respecting "reciprocity on European rules".

Nevertheless on Monday evening Lactalis announced it had raised its direct and indirect stake in Parmalat to 13.67 percent.

French companies have been on a buying binge in Italy recently, to the dismay of the government.

Luxury group LVMH has taken control of jeweller Bulgari, EDF is in discussion with Italian power company Edison and insurer Groupama is expected to take a part of Premafin.

© 2011 AFP

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