Just weeks after offering US$110 million for the UHT milk and cheese operations of Lacteos deo Brasil, Italy-based Parmalat has announced that it has signed a memorandum of understanding to acquire the assets of Brasil Foods for US$805 million (€610 million). The purchase will include 11 dairy plants and numerous brands. This year Brazil has pushed to create a milk surplus just when markets are amply supplied by increased production in global suppliers like New Zealand and Europe. The Brasil Foods dairy division saw costs increase 19.3% last year while sales only increased by 3.5%. After increasing prices by 24% the company saw a drop in volumes of 15.4%. Brasil Foods ranked third for market share in Brazil (holding 10.8%) behind Nestle and Danone, although adding Brasil Foods’ dairy assets to Parmalat’s existing assets in the country, Parmalat will now rank second in Brazil’s dairy industry.
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