French cheese giant Lactalis to take over Parmalat

28th June 2011, Comments 0 comments

French cheese giant Lactalis is expected to take control of Italy's Parmalat at a shareholder meeting later on Tuesday after a corporate battle aimed at creating the world's biggest dairy company.

The formal takeover of Parmalat is only set to be completed next week but the company behind President camembert already holds a 29-percent stake -- enough to enable to have nine candidates elected to the 11-person board.

The two other posts on the board would go to minority shareholders.

Lactalis and Parmalat, a firm based in Parma in northern Italy which has recovered from one of the biggest corporate bankruptcy scandals in Europe in 2003, would have a turnover of around 14 billion euros (20 billion dollars).

Parmalat's its founder and former chief executive Calisto Tanzi is now in prison and the company employs 14,000 people -- less than half the number before the scandal -- but it retains a strong international network.

The Lactalis takeover would signal an end to the tenure of Enrico Bondi, the man who revived the group after its bankruptcy and who opposed the takeover.

The French firm's choice of director of Parmalat has not yet been announced but news reports say it could be Antonio Sala, head of Lactalis Italy.

Franco Tato, a former chief executive of Italian electricity giant Enel, is expected to become the new chairman of the Italian firm.

Nominations are to be confirmed at the first meeting of the board.

The Lactalis takeover comes after a months-long standoff characterised by Italian nationalist sentiment against the foreign takeover.

Lactalis announced in March that it held 11 percent of Parmalat and continued buying up shares. The move raised hackles in Italy, coming after the takeover of historic jeweller Bulgari by French luxury group LVMH.

The Italian government counter-attacked, authorising Parmalat to delay a shareholder meeting that had initially been scheduled for April in order to allow a group of Italian companies to make a counter-offer.

Lactalis struck back by making a surprise announcement of a takeover bid on April 26, the same day that French President Nicolas Sarkozy visited Rome for a summit with Italian Prime Minister Silvio Berlusconi.

Parmalat rejected the Lactalis offer of 2.60 euros per share that valued the company at 4.5 billion euros but was below the 2.80 euros a share paid by Lactalis earlier this year while it was bolstering its stake.

The French company, which already has a debt mountain of 4.3 billion euros, has resisted any increase in the offer.

© 2011 AFP

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