Newlat agrees to buy Italian dairy group Centrale Latte d'Italia

[MILAN] Italian food group Newlat said on Tuesday it had signed an agreement to buy a 46.24 per cent stake in dairy group Centrale del Latte d'Italia (CLI) , in a deal that will create the third biggest domestic operator in the sector.

The Parma-based owner of the Delverde pasta brand said it would buy the CLI stake from a group of shareholders, including top investor Finanziaria Centrale del Latte di Torino, at a price of 1 euro and 0.33 Newlat ordinary shares for each CLI share.

Newlat will then launch a mandatory takeover bid on the remaining CLI shares at the same price. The CLI shareholders selling their stake will reinvest in Newlat by buying a 5.3 per cent shareholding.

Newlat, which produces pasta, bakery products and baby food, said that the acquisition will boost its revenue to 500 million euros (US$533 million).

CLI produces and sells about 120 products including milk and its derivatives, with brands such as TappoRosso, Mukki, Tigullio and Vicenza. CLI recorded revenues of 180 million euros (US$198.04 million) last year and core earnings of around 6 million euros.

Newlat said its revenues rose 5 per cent to 320 million euros last year driven by pasta and dairy products.

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The company said on March 19 that in the first two weeks of March, when Italians stocked up food products in response to concerns about coronavirus, it recorded a 35 per cent rise in sales compared with the same period last year.

REUTERS