MILAN, Italy — THE French dairy company Groupe Lactalis said yesterday that it has reached a euro744-million (US$1-billion) deal to raise its stake in Italy’s Parmalat to 29 per cent — a move that is likely to raise Italian government objections.

Lactalis said it agreed to buy from three shareholders a 15.3 per cent stake for euro2.80 a share in both cash and stock, making it by far the largest stakeholder. The price is a 14 per cent premium on Monday’s euro2.40 closing price.

Italian officials have indicated that they would move to protect Parmalat’s Italian identity, going so far as to call the dairy company a strategic business — a term usually reserved for industries with vital assets such as defence or high technology.

Industry Minister Maurizio Sacconi asserted that agricultural assets also qualify. “Certainly, we must be worried about strategic activities like those related to energy or the agriculture and food supply,” Sacconi said.

Lactalis would purchase the shares from Mackenzie Financial, Skagen AS and Zenit Asset Management AB to make it the biggest stakeholder. The next largest would be Blackrock Inc, with 4.94 per cent, according to the Italian Stock Exchange.

Lactalis said it would buy the shares yesterday either through a direct purchase or equity swap. It will inform the markets of the breakdown “as soon as possible”.

Parmalat shares were suspended briefly due to the announcement and were trading down 7.3 per cent at euro2.28 in late day trading.

The head of Italy’s anti-trust authority said he was paying close attention to the moves.

“We take interest in the situation when there is a de facto change of control, not when it is a legal change of control,” Antonio Catricala was quoted by ANSA as saying. “Probably in this case, it is a de facto change of control.”

Italy’s main farm lobby, Coldiretti, estimated that the French move would put under Lactalis’ control 10 per cent of the 4.5 million tons of milk produced in the region of Lombardy, representing 40 per cent of Italy’s milk production.

Parmalat became a symbol of corporate greed when it collapsed under euro14 billion in debt in 2003. It has successfully turned around by focusing on its core dairy business.

The company remains a household staple across Italy as a producer of milk, yogurt and juices under the Parmalat brand.

Lactalis, meanwhile, is present in Italy with the dairy brands Galbani, Invernizzi and Cadermartori.

Italian pride was wounded when French colossus LVMH Moet Hennessy earlier this month agreed to buy Rome-based luxury jeweller Bulgari SpA, with commentators asking why Italian companies have not formed a large luxury group to defend Italian brands. Like Bulgari, most Italian luxury houses are family companies.

Finance Minister Giulio Tremonti has indicated that the government is likely to try and protect what it considers country’s strategic businesses, noting that “French law protects its strategic businesses”.

Premier Silvio Berlusconi successfully engineered the sale of the government’s stake in carrier Alitalia to Italian bidders, derailing an attempt by Air France-KLM to take over Italy’s flagship airline.