Parmalat keen on dairy unit of Goodman Fielder: report
Italian-based dairy group Parmalat SpA is considering a bid for the dairy unit of Australia’s largest food company – Goodman Fielder, according to Italian reports.
Parmalat, which owns the Pauls, Vaalia and Physical brands, last year failed in an attempt to expand their dairy operations, withdrawing their bid for Australia’s Dairy Farmers after failing to come to a suitable agreement with their proposed joint venture partner Murray-Goulburn.
Italian newspaper la Repubblica reported on Saturday that the dairy giant was mulling a bid for Goodman Fielder’s dairy unit as Chief Executive Enrico Bondi sought ways to shore up margins in a difficult economic environment.
Goodman Fielder’s primary dairy interests are in New Zealand, with their brands including Activate – a probiotic yoghurt, Meadow Fresh, Meadow Lea, Chesdale and Puhoi Valley Cheese. In August, they recorded a $170 million write-down of their NZ dairy unit, which accounts for about one-sixth of their revenue.
Goodman Fielder Chairman Max Ould noted in a November meeting with shareholders that there was recently the potential to enter into the Australian dairy market, hinting that they may have considered a purchase of Dairy Farmers. However, “recent acquisition opportunities would not have added value at the prices paid,” Mr Ould claimed.
Goodman Fielder recently had to respond to a share price inquiry from the ASX after their shares rose 18 per cent in the week from January 5 – January 9. The company was unaware of any reason for the rise, adding that they still expected a 15 per cent drop in profits for the first half of the financial year.
Prior to the sale of Dairy Farmers, Mr Bondi indicated that a sale of Parmalat’s Australian dairy business would be considered if they failed in their attempts to expand. Speculation about an exit from Australia then increased following an investor briefing in Milan when Parmalat officials informed investors that they were mulling several options for their Australian operations – including that of exiting the market.
A spokesman for the company quashed the rumour of a sale in September, highlighting that Australia was still a part of the Italian dairy giant’s plans, but a review of options would continue in the wake of dairy industry consolidation.
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