In Olive-Oil Deal, Citigroup Held Back Amid Spanish Opposition

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“Banks have to be extraordinarily sensitive to governments,” said Peter Hahn, who lectures at Cass Business School in London and who formerly worked for Citigroup. “It’s hard to imagine that any government could oblige a bank to provide finance to a company but they could certainly discourage them.”

The Spanish agriculture ministry, which has led the government’s response to the potential Italian purchase of Deoleo, declined to comment.

Citigroup’s investment-banking business brings in more revenue in Spain than in Italy. In 2013, it earned $83 million in Spain, where it ranked third among investment banks, and $45 million in Italy, where it ranked 11th, according to Dealogic.

The board of Deoleo agreed on April 10 to sell the company to CVC Capital Partners, a private-equity firm based in the U.K., where the weather is too damp and gray to produce many olives. The bid for €0.38 a share values Deoleo at €438.8 million ($609.3 million). Deoleo owns 11 olive-oil brands, including Italy’s Carapelli and Bertolli, a household name in Italy that also has a big presence in American supermarkets. Its Carbonell brand is the market leader in Spain. Deoleo’s oils also have dominant positions in Germany, Japan, Mexico and Canada.

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