A French bid for an Italian dairy giant offends national pride

THE Alps are just not high enough to bar Gallic marauders. Earlier this month LVMH, a Parisian luxury-goods giant, made off with Bulgari, a Roman jeweller; and French firms have recently had an Italian insurer and power company in their sights. Now milk, yogurt and cheese are on the menu. On March 22nd Lactalis, a French dairy group, said it had increased its stake in Parmalat, its largest Italian counterpart, to around 29%, just below the threshold for a mandatory takeover offer. The next day Italy’s cabinet met to discuss granting itself new powers to block foreign bids for “strategic” companies.

With annual sales of €8.5 billion ($11.3 billion), Lactalis is twice Parmalat’s size. And it knows Italy. Between 1997 and 2006, a decade in which Parmalat went from boom to bust, it bought three Italian cheese brands to become the country’s biggest cheesemaker. The new Parmalat—formed after the old one collapsed in 2003, in Europe’s biggest bankruptcy—made net profits of €285m last year and was sitting on €1.4 billion of cash in December. Its boss, Enrico Bondi, is credited with turning the company around. But he is under fire. Three foreign funds, which have now sold their shares to Lactalis, had been seeking to boot him out. A new board, for which Lactalis has put forward its list, will be chosen by shareholders at their next meeting. ...