Parmalat
Rome is poised to bolster Italian food, energy, defence and telecom firms against foreign takeovers, in a move that could stymie a bid by French dairy giant Lactalis to gain control of rival Parmalat SpA. The restrictions, first mooted by Italian Economy Minister Giulio Tremonti last week, would permit target companies to use similar defences to those allowed in the country of the buyer, a government source said Wednesday.
They come as Italy's biggest listed food maker Parmalat and No. 2 power group Edison SpA are engaged in battles for control with French shareholders. French luxury group LVMH Moët Hennessy Louis Vuitton SA is also buying Italian jeweller Bulgari.
The measure would "identify certain sectors the government believes to be strategic on which it reserves the right to intervene when it discovers the investors come from protected markets," Stefano Saglia, the junior industry minister, said at a conference in Ravenna.
Foreign investors acquiring Italian companies need to obtain government approval 60 days in advance, Italian newspapers said. They would also give Italy's stock market regulator Consob equivalent powers to France's AMF to require clarification of potential hostile offers.
"This move continues a recent trend in Europe to provide greater protections for target companies. We saw a similar consternation in the U.K. in the wake of Kraft's takeover of Cadbury," said Prof. Scott Moeller of London's Cass Business School.
The moves echo a similar French decree introduced after speculation in 2005, which was never confirmed, that PepsiCo Inc. wanted to buy French food firm Groupe Danone SA. This began a lurch toward what France's prime minister at the time, Dominique de Villepin, dubbed "economic patriotism."
"It is unfortunate that the Italians are following the French rather than the French [and the Italians]providing greater openness. Some of the sectors identified as 'strategic' are anything but that in today's linked economies of continental Europe," Prof. Moeller added.
The fact that Rome's restrictions would be based on similar measures in France would help get around potential objections from European authorities in Brussels, the newspapers said.
The wider scope for government action on takeovers was underlined Monday when Italy's tax agency said it was checking whether the sales of stakes in Parmalat and jeweller Bulgari were in line with tax rules.
In another move, Italian antitrust chief Antonio Catricala has asked Parmalat and Lactalis for more information about possible changes in control of Parmalat.
A group of Italian companies are looking at ways of preventing Parmalat from falling under foreign control. But Italy's top food group Ferrero SpA, one of the parties involved, is not currently considering a full takeover of the dairy company, a source familiar with the situation said.
Ferrero, maker of chocolate spread Nutella, would wait for the decision by the Italian government on the possible anti-takeover law before choosing its course of action.
Lactalis, Europe's largest dairy group, has raised its stake in Parmalat to just below 30 per cent and was poised to take a majority of board seats at a meeting next month.
Lactalis said it had no comment to make on Italy's anti-takeover regulations or on speculation about Ferrero getting involved. "We are still open to talks contributing to the expansion of Parmalat in Italy and internationally," Lactalis spokesman Michel Nalet said.
Ferrero declined to comment.
The only measure so far confirmed by the Italian government will allow Parmalat to postpone its crucial AGM beyond April 14, giving its Italian supporters time to create a fully formed consortium and work on a defence against Lactalis.
"Cabinet approved a decree which extends the deadline for summoning the shareholder meeting. This is a measure which will allow us to evaluate whether it is appropriate to introduce other measures which could also concern the Parmalat group," Italian Industry Minister Paolo Romani told Parliament.
Mr. Romani said the government had met financial and business groups with the aim of creating a national alliance of the food sector, adding that it was following the Parmalat case very closely and wanted to ensure that the entire chain of food production was kept in Italy.
"For this reason, there have been meetings with the main operators in the sector with the aim of creating an alliance which would put financial and industrial participants together to create a national food grouping that would be in a position to compete on the global market," he said.