An Italian food company will become Canada’s largest dairy processor if a bid for Ault Foods Ltd. is accepted by shareholders.
Parmalat Finanziaria announced June 9 it will offer $34 a share for all outstanding common shares of Ault, maker of Black Diamond cheeses and Parkay margarine. The total value of the deal would be $415 million.
Ault’s board of directors has agreed to recommend that shareholders accept the offer. The board earlier recommended to reject an offer of $28 a share from the Saputo Group of Quebec.
The Parmalat offer was to be mailed to Ault shareholders by June 11 and will be open for at least 21 days.
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“We believe that this bid provides Ault shareholders with an attractive opportunity to achieve value for their shares,” said Graham Freeman, Ault president and chief executive officer. “Parmalat will be able to develop a strong presence in North America by adding cheese and tablespreads to its other existing dairy and bakery businesses.”
Earlier this year Parmalat bought a controlling interest in Beatrice Foods.
Beatrice has 24 processing facilities in Canada, producing milk, yogurt, fruit juices and drinks at plants in Alberta, Saskatchewan, Manitoba, Ontario and Quebec as well as bakery operations in Canada and the United States.
The combination of Beatrice and Ault will produce a company with sales near $2 billion annually.
Ê Parmalat is active in Western and Eastern Europe, Latin America and the United States. It has annual sales of more than $5 billion and 22,000 employees.
Its principal brands are Parmalat (milk), Kyr (yogurt), Chef (cream sauces), Pomi (tomato-based products) and Santal (fruit juices). Parmalat shares are publicly traded on the Milan Stock Exchange.
Ê Ault has annual sales of $880 million from operations remaining after it sold its Ontario fluid milk operations to Agropur dairy co-operative of Quebec for $145 million and its ice cream division to Nestle Canada for $221 million.
Its business now includes production of cheese and tablespreads, licensing dairy technologies and Quebec fluid milk. Major brands include Black Diamond, Schneider’s, Lactantia, Cheestrings, Ficello, Balderson and Parkay.
