London-listed cheese and butter maker Dairy Crest has agreed to be acquired by Montreal-based Canadian dairy company Saputo in a near-£1bn deal.
The acquisition is Saputo’s first major deal in Europe. The Canadian company said Dairy Crest was an “attractive platform” for growth in Britain that “fits well within our growth strategy”.
Saputo will pay 620 pence in cash for each Dairy Crest Share, valuing Dairy Crest at approximately £975 million. The price of 620 pence per share is a premium of approximately 11.7 per cent to Dairy Crest’s closing price of 555 pence on Thursday.
According to a news release by Saputo, “the board of directors of Dairy Crest intends to unanimously recommend to shareholders of Dairy Crest to vote in favour of the Transaction.”
Dairy Crest has a portfolio of market-leading brands including Cathedral City cheese, Clover dairy spread, Country Life butter and Frylight cooking spray. The company has approximately 1,100 employees in seven locations across the United Kingdom.
Saputo is one of the largest dairy processors in the world. The company operates 62 plants in 40 countries. It is the largest cheese manufacturer and leading milk and cream processor in Canada and biggest dairy processor in Australia. In the United States, Saputo is among the top three cheese producers.
Saputo chairman and chief executive Lino Saputo Jr was quoted by the BBC as saying: “We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest’s employees and stakeholders.”
Shares in Dairy Crest surged by as much as 13% on Friday after the deal was announced.
According to the BBC, Dairy Crest said that “virtually” all of its jobs in the UK are safe, including those at its Surrey head office.
However, Unite, the UK and Ireland’s largest union which represents workers across Dairy Crest’s UK operation, said it is seeking “an urgent meeting with Saputo”, the Canadian diary giant following the announcement that the company has tabled a takeover bid for Dairy Crest.
Unite national officer for the food industry Sue Pollard said: “Unite is cautiously optimistic that Saputo is seeking to develop Dairy Crest’s operation in the UK over the long-term. “Unite is now seeking an urgent meeting with the senior management at Saputo to receive detailed information about the company’s plans and secure assurances about employment levels and a commitment to maintaining existing plants.”
