France's Lactalis to Acquire Brazil Dairy Brand Itambé

Groupe Lactalis SA on Tuesday announced plans to buy Brazilian dairy company Itambé Alimentos SA in the first half of 2018, as the French group expands in Latin America’s largest economy with its second major acquisition in recent years.

Lactalis will pay about $600 million to the cooperative that owns Itambé, according to a person with direct knowledge of the deal, asking for anonymity because the discussions are private.

In a joint statement announcing the deal, Lactalis and CCPR, a cooperative of milk producers based in the Brazilian state of Minas Gerais, did not disclose the value of the transaction.

The deal, including a long-term supply contract between CCPR and Itambé, is conditioned on approval by antitrust agency Cade.

Lactalis owns several dairy brands in Brazil, including Batavo, Elegê and Parmalat. The French company acquired dairy plants from the world’s largest poultry exporter, BRF SA, in 2014 for 1.8 billion reais ($557 million).

Itambé was once partially owned by Vigor Alimentos SA, which was sold by J&F Investimentos to Mexico’s Grupo Lala SAB de CV in October.

Vigor had a 50 percent stake in Itambé and CCPR owned the other 50 percent. In September, the cooperative exercised an option to acquire Vigor’s stake, and Lala concluded the acquisition of Vigor without the Itambé brand.

($1 = 3.23 Brazilian reais)