logo-loader

Canada's Saputo to buy U.S. dairy firm Morningstar for $1.45 bln

Last updated: 01:03 04 Dec 2012 AEDT, First published: 02:03 04 Dec 2012 AEDT

no_picture_pai

Canadian cheese maker Saputo Inc. (TSE:SAP) Monday will pay $1.45 billion to buy Morningstar Foods, a U.S. company that makes a variety of dairy and non-dairy products such as creams, ice cream mixes, sour cream and cottage cheese.

Saputo is the world’s 12th largest dairy processor and the biggest in Canada.

Morningstar has about 2,000 employees and 10 manufacturing plants in the U.S. It had the equivalent of $1.6 billion in revenue during the 12 months ended September.

"Through this acquisition, Saputo will benefit from Morningstar's national manufacturing and distribution footprint and will optimize coast-to-coast service," the Canadian dairy foods company said in a statement.

"This transaction will expand product offering to customers in the United States and broaden the range of Saputo's future acquisition opportunities."

Morningstar is currently a subsidiary of Dean Foods (NYSE:DF), which said in a separate it expects to receive $887 million from the sale after taxes and expenses. It said the money would be used to reduce Dean's debts.

Dean Foods chairman Gregg Engles added: "Morningstar is an attractive business and we believe that it will continue to grow and thrive in Saputo's portfolio."

Following the Morningstar acquisition, Saputo will have about 12,000 employees and 57 manufacturing plants in five countries.

From its modest beginnings more than 50 years ago as maker of mozzarella cheese in Montreal, Saputo has grown into a global cheese and dairy giant through an aggressive acquisition strategy.

Morningstar is a major transaction that follows on deals such as last year’s $270.5 million purchase of Fairmount Cheese Holdings.

Last month, Saputo chief executive Lino Saputo Jr. said he saw limited growth in Canada and was on the lookout for acquisition opportunities in the U.S. and Latin America and possibly Australia.

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

7 hours, 25 minutes ago