French food fight for Brazil firm

29 June 2011 Last updated at 07:34 GMT Pao de Acucar was founded in Sao Paulo in 1948 Two French food giants are locked in a battle to take over Brazil's number one retailer, Grupo Pao de Acucar.

Proposals to merge Pao de Acucar with the local operations of Carrefour are opposed by rival Casino, which already has a stake in the Brazilian group.

The proposed Pao de Acucar-Carrefour deal would create a firm with a 27% market share and sales of more than $40bn (?25bn) a year.

Pao de Acucar is already Latin America's second-biggest retailer.

As well as its Pao de Acucar and Extra supermarket chains, it also has a majority stake in the Ponto Frio and Casas Bahia chains that sell electrical goods and furniture.

Pao de Acucar's shares rose 12.6% on Brazil's main stock exchange on Tuesday after news of the deal emerged.

Secret talks

Brazilian investment fund Gama announced the merger plan on Tuesday. Under the terms of the offer, it will combine Pao de Acucar and Carrefour's Brazilian assets into a new company, to be called Nova Pao de Acucar.

Gama said investment fund BTG Pactual and the BNDES state development bank had committed $2.8bn to the deal, as well as $710m in debt financing.

The deal followed talks between Carrefour and Pao de Acucar chairman Abilio Diniz, whose family founded the firm in Sao Paulo in 1948.

Since 1999, Pao de Acucar has been part-owned by another French firm, Casino, which denounced the proposal to merge with Carrefour as "illegal".

Casino said it was disappointed with Mr Diniz for negotiating a deal without its authorisation.

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French bank ratings under review

15 June 2011 Last updated at 06:55 GMT BNP Paribas is one of the banks that may be affected Ratings agency Moody's has warned it may downgrade the credit rating of three French banks because of their exposure to Greek debt.

Credit Agricole, BNP Paribas and Societe Generale all face a possible downgrade because they could face losses on a Greek default.

Credit ratings are a measure of how likely a company or country is to repay its debts.

Moody's has already downgraded the credit ratings of eight Greek banks.

European leaders have yet to agree on the terms of a second bail-out for Greece.

On Wednesday, the country is expected to see another wave of general strikes against austerity measures.

In a statement, Moody's said: "Today's actions reflect Moody's concerns about these banks' exposures to the Greek economy."

Societe Generale and Credit Agricole both hold majority stakes in Greek banks.

BNP Paribas does not have a stake in a Greek bank, but Moody's estimates that it held about 5bn euros (?4.4bn, $7.2bn) of Greek government debt as of December 2010.

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Drought fund for French farmers

10 June 2011 Last updated at 10:28 GMT President Sarkozy visited farmers in the Charente region France has pledged 1bn euros (?0.9bn, $1.5bn) in compensation for farmers after the EU's top grain producer saw its worst spring drought in 50 years.

Announcing the figure in parliament, Prime Minister Francois Fillon said it might change "because it depends on the requests of the farmers".

Farmers are being offered relief on tax and loan repayments.

Drought has gripped much of northern Europe, with recent rains believed to have come too late for many crops.

Weather forecasters say it could be the worst spring drought in Germany since records began.

France also saw its hottest spring since 1900, and cattle breeders already struggling with low meat prices have seen supplies of grass and other fodder dwindle, forcing some to sell off livestock for slaughter.

Water use restrictions are now in place in more than half of France's administrative regions.

The EU agreed earlier to bring forward to mid-October the payment of certain subsidies for cattle farmers at the request of countries like France.

This week, Brussels also agreed to offer vegetable farmers hit by the E. coli crisis compensation of up to 210m euros.

'Partially satisfying'

"We now have to implement direct national support for the farmers," Mr Fillon told the French Senate on Thursday.

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I met one producer who was selling his animals rather than feed them”

End Quote Daniel Prieur Deputy head of the French farmers' union FNSEA "It is nearly a billion euros that the nation will have to commit to our farmers."

The prime minister added that a national disaster fund for farmers had already been set up and had made available 200m euros for "the most urgent cases".

President Nicolas Sarkozy visited farmers for the first time since the drought began on Thursday, Reuters news agency reports.

Meeting cattle farmers in the western region of Charente, he said: "The thrust of what we're going to do is to give you some room for manoeuvre in terms of liquidity and to put back loan repayments by one year."

Daniel Prieur, deputy head of the French farmers' union FNSEA, described the aid plan as "partially satisfying".

Interviewed by Le Monde newspaper, he said fodder was a major concern, and called for a limit of 100 euros per tonne on the price of straw, noting that it was as high as 140 euros in some parts of the country.

"I find the farmers very anxious and their morale is low," he said.

"I met one producer who was selling his animals rather than feed them. You see the animals coming out of the farms more quickly: it means fewer mouths to feed."

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