Commission clears Lactalis acquisition of Parmalat
June 15, 2011
by Eric Schroeder
BRUSSELS, BELGIUM — The European Commission on June 14 cleared French dairy company The Lactalis Group’s €3.38 billion ($4.92 billion) proposed acquisition of Italian dairy company Parmalat, concluding that the transaction “would not significantly impede effective competition in Italy or any other European Economic Area countries.”
“The Commission investigated the competitive effects of the proposed acquisition in the different markets for dairy products such as the procurement of raw milk, fresh milk, long life milk, cream and cheeses,” the E.C. said. “It found that 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 Commission investigation also concluded that the combined entity would not be in a position to restrict competition in relation to the sourcing of raw milk or as a result of the extension of its portfolio of products.”
In March Lactalis acquired a 28.97% stake in Parmalat and, on May 23, it launched a public bid to purchase all the shares in Parmalat. The acquisition would create one of the largest dairy companies in the world with annual revenues of approximately €14 billion.