Italy and France move to defuse Parmalat row

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Italy and France move to defuse Parmalat row

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French firm Lactalis has launched a takeover bid for Italian rival Parmalat to create the world’s biggest dairy group.

Lactalis bought 29 percent of Parmalat’s shares last month, prompting a scramble by Italian investors – with the help of the Rome government – to put together a consortium to keep it from falling into foreign hands.

Lactalis made its bid just hours before a meeting between Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy in Rome.

At a joint news conference, Berlusconi said he hoped Italian groups would reach an accord with Lactalis. He added: “I don’t consider this to be a hostile takeover bid. We agree that the best thing to do is to allow the creation of big international groups.”

Sarkozy said Paris and Rome would appoint advisers to “help bring the two sides together”.

Lactalis is offering 2.60 euros a share, making a total of 3.4 billion euros for the 71 percent of Parmalat it does not own.

The status of an Italian counter-bid remains unclear. European Union regulators say they have been following Italy’s efforts to fend off Lactalis to make sure the bloc’s merger rules are not broken.

Analysts have said Parmalat, known for its long-life milk, could be strategic for Lactalis to grow beyond its cheese activities and expand in markets like Canada, South Africa and Australia where it has little or no presence.

Parmalat shares rose nearly 11 percent on Tuesday.