Deoleo felt the full brunt of the financial crisis moving from a market value of 1,5 bn to a little more than 300 million. The company has near 22% of world market thanks to the good positioning of its Spanish and Italian brands, which lead main markets of developed countries.
A number of savings banks with a stake in the company were willing to sell for juicy cash. Finally, the astronomical debt reached €1.5 bn at its peak. All of these points forced Deoleo to embark on reorganisations and disinvestments that ended on April with the sale of a major stake of 29.99%. This percentage is to include 16.5% owned by Bankia and 4.8% of Banco Mare Nostrum (BMN), both forced to sell their participations as they received European support during the crisis, as well as a 8.64% stake of the cooperative Dcoop. The operation priced at 0.38 euros per share.
The terms of CVC’s agreement with Deoleo also includes a capital increase of 10% as well as a takeover bid at the same price and additional financing to reduce the Spanish company debt of € 473 M.
Rajoy’s government was particularly concerned about the ‘Spanishness’ of the company. Rumours about Italy’s sovereign fund FSI also interested in participating in Deoleo’s operation warned Spain’s Ministry of Agriculture. They consider olive oil’s sector as strategic since Spain produces almost 50% of world production, exccedingly over Italy which holds a market share of 15%.