France’s Lactalis seeks buyout of Parmalat

French dairy group Lactalis, the world’s largest dairy firm announced on Tuesday it was seeking a buyout offer for remaining shares of Italian dairy firm Parmalat for which it does not already own. Lactalis controls 83.3% of Parmalat and is seeking to acquire additional 12.26% shares, according to a statement released by Sofil – the invest arm of the Besnier family that owns Lactalis.

The French group said it would continue to support Parmalat’s growth, however, stating that those objectives would be easier to achieve with a smaller shareholder base. Lactalis said it would delist Parmalat from the Milan Stock Exchange once the deal was closed.

Lactalis first took controlling interest in Parmalat when the Italian firm filed for bankruptcy in 2011, following a misstating of its financials two years earlier.

The acquisition of Parmalat by a non-Italian firm has been a sore subject for investors and the Italian government.

Shares in Parmalat best known for its long-life milk rose more than 10% on Tuesday to €2.82, the highest level it has seen in more than nine years. Lactalis had bid €2.80 euros per share for the remaining shares.

Parmalat, based in Parma, Italy was founded in 1961 but filed for bankruptcy protection in 2003 after hiding losses and misreporting its financials, leading to a $14.63bn loss. The company was acquired by Lactalis for €2.5bn ($3.6bn) in 2011 and a much smaller company emerged from bankruptcy in 2005. Parmalat has operations in 24 countries and reported revenue of €6.42bn in 2015 and €444.5m in core earnings (EBITDA).

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