December 4, 2012

Saputo to purchase Dean Foods' business

Canadian dairy firm, Saputo, may soon acquire Dean Foods's Morningstar business.

Dean Foods' Morningstar division manufactures a variety of private label and branded dairy and non-dairy extended shelf life products, including creams, creamers, ice cream mixes, value-added milk and cottage cheese.

Saputo hopes to expand its presence in the US market through the acquisition of Morningstar, which it believes will complement the activities of its existing US Dairy Products Division.

"Through this acquisition, Saputo will benefit from Morningstar's national manufacturing and distribution footprint and will optimise coast-to-coast service. This transaction will expand product offering to customers in the United States and broaden the range of Saputo's future acquisition opportunities", quoted a Saputo announcement.

Saputo expects the deal, which will be financed through a newly-committed bank loan, to have an "immediate" impact on earnings.

Commenting on the deal, Dean Foods chairman, Gregg Engles, said that Morningstar will be "well positioned for continuing success and future growth."

"Dean Foods will use substantially all of the net proceeds from the sale of Morningstar to significantly reduce outstanding debt, resulting in a stronger balance sheet and increased flexibility to execute against our strategies for our core dairy business," added Dean Foods CEO, Gregg Tanner.