European Commission clears acquisition of Parmalat by France's Lactalis

[News_Editor]

European Commission clears acquisition of Parmalat by France's Lactalis

2011-06-14 21:13:33 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- The European Commission on Tuesday cleared the acquisition of the Italian dairy group Parmalat by the French company Lactalis after concluding an investigation of the transaction.

The Commission, under the EU Merger Regulation, concluded that the acquisition of Parmalat would not significantly impede effective competition in Italy or any other European Economic Area (EEA) countries.

Last March, Lactalis acquired a 28.97 percent stake in Parmalat and then launched a public bid to purchase all the shares in the Italian company on May 23. The Commission soon launched an investigation on the competitive effects of the proposed acquisition for the dairy products' market.

The probe has now determined that the proposed transaction would not significantly modify the structure of the markets for dairy products such as the procurement of raw milk, fresh milk, long life milk, cream and cheeses 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's 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.

On April 18, a Milan Court acquitted of market-rigging four major international banks and their managers over the Parmalat fraud case. In December 2003, the Italian dairy group was declared bankrupt after it surfaced that a Bank of America account, supposedly holding about $5.69 billion (€4 billion), did not exist.

The Parmalat scandal, the biggest financial collapse in European history, was also known as Europe's Enron after amassing approximately $20.63 billion (€14.5 billion) in debts. The U.S. Securities and Exchange Commission labeled the case as ''one of the largest and most brazen corporate financial frauds in history."

Last December, former Parmalat's founder and ex-CEO Calisto Tanzi was sentenced to 18 years in prison. He was previously sentenced to 10 years of imprisonment for market-rigging and providing false information to a stock market regulator.

-- © BNO News All rights reserved 2011-06-14