Newlat in talks to buy Italian dairy group as coronavirus boosts sales

Centrale del Latte d'Italia SpA

19/03/2020 19:04

MILAN, March 19 (Reuters) - Italian food group Newlat
 NWLF.MI  said on Thursday it had entered talks to buy a
majority stake in dairy group Centrale del Latte d'Italia
 CLII.MI , adding the coronavirus outbreak was boosting its food
sales.
    Newlat, which produces pasta, bakery products and baby food,
 said that the acquisition of Centrale del Latte d'Italia (CLI)
would boost its revenue to 500 million euros ($533 million).
    "The strategic rational is combining the two companies'
production capacity to become one of the leaders for dairy
production in Italy," Newlat Chief Executive Giuseppe Mastrolia
said in a conference call on 2019 results.
    The owner of Delverde pasta brand said on Thursday it had
signed a letter of intent with CLI's top investor Finanziaria
Centrale del Latte di Torino to negotiate the acquisition of a
majority stake in the dairy group.
    CLI's revenue were 180 million euros last year, with core
earnings of around 6 million euros. Parma-based Newlat said its
revenue rose 5% to 320 million euros last year driven by pasta
and dairy products.
    Newlat said that in the first two weeks of March, when
Italians stocked up food products in response to concerns about
the coronavirus, it recorded a 35% rise in sales compared with
the same period of last year.
    "The high demand is for our products with a long-shelf life
including pasta, baby food and bakery products ... we are doing
all our efforts to satisfy our customers and we can win new
ones," the CEO said.
    
($1 = 0.9378 euros)

 (Reporting by Francesca Landini; Editing by Steve Orlofsky)
 ((francesca.landini@thomsonreuters.com; +39 02 66129437;
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