Italian court to quiz Parmalat over Lactalis America deal

Mon Oct 8, 2012 2:31pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

MILAN (Reuters) - Italian food group Parmalat has received a request from a civil court in the northern Italian city of Parma to attend a hearing later this month relating to an investigation into a U.S. deal by its parent Lactalis.

The hearing on October 26 is part of a wider criminal probe by prosecutors in Parma into alleged irregularities in the deal, in which Parmalat agreed in May to buy Lactalis American Group for more than $900 million.

Italy's market regulator Consob has questioned the use of part of Parmalat's 1.5 billion-euro cash pile to finance the acquisition, which was completed in July.

The investigation is at a preliminary stage and does not target a specific crime or person, a judicial source said on Friday.

Parmalat reiterated on Monday that the transaction was carried out in the interest of the company, in a transparent way and in accordance with the law.

The dairy group has repeatedly said that the deal, which was unanimously approved by its board and its internal control and governance committee in May, was motivated by prospects of expansion in the growing North American market.

French dairy company Lactalis took control of Parmalat in a 4.3 billion euro takeover last year. There had been hopes that Parmalat could stay in Italian hands but a counter-bid for the cash-rich food company failed to materialize.

(Reporting by Antonella Ciancio. Editing by Jane Merriman)