MILAN (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.
Reporting by Francesca Landini; Editing by Steve Orlofsky
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