Lactalis launches 3.4 bn euro bid for Parmalat
French giant Lactalis launched a takeover bid worth around 3.4 billion euros ($4.9 billion) for Italy's Parmalat on Tuesday and said it wanted to create the world's top dairy products company.
Lactalis already owns 29 percent of Parmalat and a group of Italian companies has been scrambling to block the takeover amid nationalist sentiment and fears over the French company's dominant role on the Italian market.
Investors cheered the takeover announcement, with Parmalat shares rocketing up 11.25 percent to 2.572 euros on the Milan stock exchange. Trading in the shares had been frozen at the start of the day before the report.
Lactalis, already the world's top cheese producer, said it was offering 2.60 euros per share for the deal.
"The Lactalis Group combined with Parmalat will have an annual turnover of around 14 billion euros, which would make it the biggest group in the world for dairy products," Lactalis said in its statement.
Lactalis chief Emmanuel Besnier said the French giant had "an ambitious growth project" for Parmalat that would increase the firm's visibility on the world stage while keeping its headquarters in Italy.
The announcement comes ahead of a summit in Rome later on Tuesday between French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi.
Italy and France are at loggerheads over immigration and there has also been a falling out as Italy sought to stave off the Lactalis takeover.
"We're living in a single market reality," a source from Sarkozy's entourage told AFP ahead of the talks. "There is a common law that we respect that is applied in France as it is in Italy," the source said.
Interviewed in French business daily Les Echos, Franco Bassanini, the head of Italy's state-controlled Cassa Depositi e Prestiti bank, accused France of double standards in defending the Lactalis bid for Parmalat.
He said France had itself blocked a bid by Italian energy giant Enel for French electricity and natural gas firm Suez in the past.
"Parmalat has a leading role in the food and beverage sector and some people suspect Lactalis of only wanting to access its funds," he said.
"It's normal for the government to look for an Italian solution," he said.
© 2011 AFP