Cathedral City cheese maker Dairy Crest has agreed to a takeover by a Canadian firm in a deal worth nearly £1bn.
Saputo, one of the world’s biggest dairy processors, will pay 620p a share, valuing the the UK company at £975m.
Dairy Crest, whose other brands include Country Life butter, Utterly Butterly and Clover spread, saw its shares surge by 12.9% after the proposed sale was announced.
Saputo, which does not currently have a foothold in Europe, said it was driven by “a desire to increase its international presence and enter the UK market by acquiring and investing in a well-established and successful industry player”.
The Canadian firm saw Dairy Crest “as an attractive platform for growth in the UK”.
It intended Dairy Crest would continue to manufacture its products from its existing facilities in the UK “managed and run by the current senior management and employees”.
Saputo signalled most jobs would be safe, foreseeing “only limited rationalisation of employee roles following the acquisition, mainly targeted at corporate and support functions”.
The company’s 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 Dairy Crest’s employees and stakeholders.”
Dairy Crest chairman Stephen Alexander said: “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 Dairy Crest 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.”