Parmalat signed to buy BRF dairy division

Brazil Foods has agreed to sell its dairy processing plants to Parmalat for 610 million euros
Parmalat signed to buy BRF dairy division

Parmalat, the Parma based dairy company controlled by Lactalis, announced that it has signed the contract for the acquisition of the dairy division of BRF SA., one of the Brazil’s top companies in the food sector. The purchase likely makes Parmalat the second largest dairy company in Brazil, surpassing Danone and trailing only Nestlé. The deal comes six month after Brasil Food announcement it was selling its dairy division, with the auction reportedly attracting interest from 14 suitors, including France Danone, Swiss based Nestlé and Grupo Lala, Mexico top milk’s processor.

The transaction has been carried out through the acquisition by Lactalis do Brazil Ltda subsidiary, of the entire share capital of a company (Newco) to which BRF conveys all of its dairy business assets, including 11 production facilities located in Brazil and the brands Batavo, Elegé, Cotochés, Santa Rosa and DoBon. Dairy was one of the market in which Brasil Foods has a relatively small market share, in 2013 it controlled of 10.8%, compared with more than 50% in many of its main food market. The group ranks third in Brazilian dairy, behind Danone and Nestlé, although it is believed that Parmalat, which had already some assets in the country, may now take the second place.

Parmalat is investing heavily in the Brazilian market. Last year, the Group acquired Balkis Industria e Comércio de Laticìnos Ltda, a company active in the sector of typical gourmet cheese and in November 2014, bought the dairy operations of bankrupt Lacteos do Brazil.

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