Lactalis takes Parmalat to create world's top dairy firm

Lactalis, the company behind President cheeses, only holds a 29% stake in Parmalat at the moment but the holding was enough to allow it to get nine of the 11 seats on Parmalat's board at the meeting in Parma.

Franco Tato, a former chief executive at Italian electricity giant Enel, was elected as the new chairman of the board for a major Italian company that has emerged from one of Europe's worst corporate fraud scandals in 2003.

Lactalis and Parmalat, which was founded in the 1960s by veteran chief executive Calisto Tanzi who is now in prison for fraud, would have a combined annual turnover of around €14 billion (20 billion dollars).

Parmalat employs 14000 people, less than half the number from before the scandal, and retains a strong international network.

Tuesday's vote brought to an end the tenure of Enrico Bondi, the man who revived the group after its bankruptcy and who opposed the takeover.

Bondi said he hoped the firm's future would be "fruitful and full of success" and said he had refused an offer from Lactalis to be on the new board.

The make-up of the board now includes Antonio Sala, head of Lactalis Italy, who is widely tipped to be the new chief executive of Parmalat.

The chief executive is set to be named at the board's first meeting in the coming days.

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

At the meeting on Tuesday, a minority shareholder who spoke on condition of anonymity said he regretted the fact that Italy was not able to oppose Lactalis taking over "the last jewel of the Italian food sector."

But Marco Pedretti of the shareholder association Azione Parmalat told AFP: "He who pays is always right". Pedretti said he hoped Lactalis would "help" Parmalat improve profitability and reward shareholders.

Parmalat rejected the Lactalis offer of €2.60 per share that valued the company at €4.5 billion but was below the €2.80 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, has resisted any increase in the offer.

Source: AFP