Lactalis agrees to acquire Saputo’s UK business

Lactalis, the privately owned French dairy group, has agreed to acquire Saputo’s UK operations. The transaction is the company’s fourth dairy deal in two months, according to the announcement. Lactalis did not disclose a purchase price; Saputo, which is listed in Toronto, put the value at approximately £988m ($1.33bn).

Completion is scheduled for the end of the first quarter next year, provided that the necessary regulatory approval is obtained. Saputo UK recorded revenue of £800m in its most recent financial year.

The business includes five manufacturing sites. They are in Hawes in Yorkshire, Davidstow in Cornwall, Nuneaton in Warwickshire, Kirkby in Merseyside and on the Isle of Bute in Scotland. Lactalis said the operations employ about 1,300 people.

The portfolio contains Cathedral City and Davidstow, as well as cheeses made by Wensleydale Creamery. These include Yorkshire Wensleydale, whose geographical origin is protected. The transaction also covers Country Life butter and the Clover and Utterly Butterly spreads.

Emmanuel Besnier, Lactalis’s chairman, said the purchase was “a key milestone” in the group’s development in Britain. He said the addition of the brands and the business’s expertise would strengthen Lactalis’s position in the UK and reaffirm its commitment to dairy products.

Saputo UK serves both retail and foodservice customers. Britain accounts for 94% of its sales, with the remainder generated in Europe, the Asia-Pacific region and North America. Carl Colizza, Saputo’s group president and chief executive, described the sale as part of an effort to refine the company’s global footprint and concentrate on areas where it has a strong competitive position.

Mr Colizza said the transaction’s value reflected the UK team’s expertise, the quality of its operations and the standing of its brands. Saputo said some of the proceeds could be allocated to organic investment, capital projects and strategic acquisitions.