Canadian dairy giant Saputo has announced plans to takeover Cathedral City and Clover owner Dairy Crest as part of a £975 million deal.
Under the terms of the acquisition, shareholders will receive £6.20 for each Dairy Crest share, valuing the firm at approximately £975 million.
It’s a premium of around 11.7% on the most recent closing price of a Dairy Crest share.
Saputo
Saputo is one of the biggest dairy processors in the world employing 12,800 people and operating in Canada, Argentina, Australia and North America. However, the group does not currently have any operations in Europe.
The group’s interest in Dairy Crest is said to be motivated by a desire to increase its international presence and enter the UK market.
It sees Dairy Crest as a “well-established and successful” industry player with a solid asset base and an experienced management team.
Dairy Crest is one of the leading British-owned dairy companies and is best known for its Cathedral City, Clover, Country Life and Frylight brands.
The company, which is supplied by around 330 South West farmers also manufactures ingredients for baby formula.
Saputo chairman and chief executive Lino Saputo Jr. said: “Dairy Crest is an attractive platform for Saputo and fits well within our growth strategy.
“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 employees and stakeholders.
“This recommended offer represents a compelling opportunity for Dairy Crest shareholders, providing immediate value certainty.”
Deal backed by board
Stephen Alexander, chairman of Dairy Crest, said: “The board is unanimously recommending this all-cash offer by Saputo to buy Dairy Crest at an attractive premium, which represents compelling value for shareholders.
“Dairy Crest is a leading UK dairy company and the proud manufacturer of Cathedral City, the largest UK cheese brand. Saputo is one of the top ten dairy processors in the world. Both companies have built strong positions in the cheese sectors in their respective home markets.
“The Acquisition should enable the firm to benefit from Saputo’s global expertise and strong financial position to fulfil and accelerate its growth ambitions.
The businesses have strong shared values and the board is confident that Saputo’s plans to invest in and grow the Dairy Crest business mean the proposed transaction is positive for all its stakeholders.
“The price premium offered reflects Dairy Crest’s portfolio of market-leading brands, its manufacturing and innovation capabilities as well as its experienced management team, who will continue to run the business under Saputo’s ownership.
“It is for these reasons that the board is unanimously recommending this transaction to Dairy Crest shareholders.”
