The acquisition of French food group Lustucru by pasta maker Panzani has been given the green light by the French competition authorities, on the condition that the deal does not include Lustucru's own dry pasta arm.
French newspaper Le Figaro claims that the DGCCRF has given the all clear to the deal provided Panzani finds a buyer for the dry pasta business before the deal is completed next month. Lustucru is being sold by the Skalli group which wants to focus on its growing Mediterranean wine business.
The competition authorities were concerned that Panzani would have too dominant a position on the French pasta market if the deal were allowed to go ahead unconditionally. Panzani already has a 35 per cent share of the French dry pasta market, while Lustucru is the third largest (behind Barilla) with a 13 per cent share.
The DGCCRF's decision will not be welcomed by Lustucru's workers in Marseille, who have already been on strike for two weeks in protest at the uncertain future of the business.
A number of potential buyers for the dry pasta business have already emerged, the paper said. Colussi, the family-owned Italian group expanded its business in 1999 with the acquisition of compatriot Agnesi, and is thought to be the most likely buyer. Colussi, which also manufactures sweet and savoury biscuits and rice, is the number two Italian pasta group after Barilla.
Barilla itself had also been linked to Lustucru, although along with Nestle and French group Chiron, it has ruled out any takeover bid.
The paper said that the sale of the dry pasta business will not be easy for Panzani, especially as the business is not viable as a stand alone unit. This means it is only likely to interest another pasta group as a means of increasing capacity and that a takeover by a venture capital group would be impossible.
The problem is that the dry pasta market in France has reached maturity at around 445,000 tonnes, with all the growth in the market coming from fresh pasta, which has sales of just 35,000 tonnes but is growing at around 10 per cent a year, according to the paper.
The enforced sale also raises questions about the future of the Lustucru brand. Panzani would undoubtedly be keen to retain the brand, which is well known in France and is the leader in the fresh pasta market with a 35-40 per cent share. But the same could be said for the eventual buyer for the dry pasta business.