July 10, 2019 / 11:08 PM / 2 months ago

UPDATE 1-Lala, Lactalis end litigation, French group acquires Brazil dairy producer Itambe

(Adds context, details on litigation and deal)

By Tatiana Bautzer

SAO PAULO, July 10 (Reuters) - French and Mexican dairy groups Lactalis and Grupo Lala SAB de CV reached an agreement to end litigation in Latin America, allowing Lactalis to conclude the acquisition of Brazilian dairy producer Itambe Alimentos SA, Lactalis CEO for Latin America Patrick Sauvageot said on Wednesday.

In an interview with Reuters, Sauvageot said Lactalis and Lala ended litigation in Brazil regarding the Itambe acquisition and in Mexico regarding the use of certain brands.

Lactalis concluded the acquisition of Itambe on Wednesday and will now process 2.3 billion liters (607 million gallons) of milk a year in Brazil.

Lactalis expects its revenue in the country to reach 8 billion reais ($2.13 billion). The conclusion of the deal had been pending the result of arbitration at the Brazil-Canada Chamber of Commerce that began around a year ago.

Lactalis, global owner of brands such as Parmalat, Galbani and Président, agreed to pay around $600 million to acquire Itambe in December 2017, less than six months after Lala acquired Vigor, which owned 50% of Itambe, in August 2017. When it bought the company, Lala valued Vigor at $1.8 billion.

Before Itambe, Lactalis had already acquired Brazilian cheese producer Balkis and some dairy units owned by BRF SA. . ($1 = 3.7543 reais) (Reporting by Tatiana Bautzer Editing by James Dalgleish and Sonya Hepinstall)

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