The European Commission has given French dairy producers Lactalis permission to take over its Italian competitors Parmalat. The French already have 28.97% of Parmalat’s shares since March and now offer 2.6 euro for each share they do not yet own.
Europe will not impose conditions
The European Commission does not interfere because “the proposed transaction would not significantly modify the structure of the relevant markets as the increments in market shares are negligible and a number of credible competitors would continue to exercise a competitive constraint on the merged entity”.
The end of a difficult month
The Commission’s permission ends a turbulent month, in which Lactalis’s first bid was refused by Parmalat and Intesa Sanpaulo, an Italian bank holding 2.4% of Parmalat, staged a failed attempt to form an Italian front to keep the French out. After the Commission’s approval, the bank has agreed to “probably” sell its shares to Lactalis anyway.
The conditional takeover only takes place if Lactalis can acquire 55% of Parmalat’s shares. The two companies would become the world’s biggest dairy producer in the world, with a 14 billion euro turnover.