Saputo swallows Neilson Dairy for $465M
Saputo Inc. is buying the dairy division of George Weston Inc. for $465 million, the company said Wednesday.
Saputo, Canada's largest milk producer, will snap up the Neilson Dairy division from Weston, which also owns Loblaws Cos., in an effort to expand its dairy business within Canada.
Three month stock chart for Saputo"This transaction will enable Saputo Dairy Products Division (Canada) to increase its presence in the Ontario fluid milk and cream market," Saputo said in a statement announcing the purchase.
Montreal-based Saputo is the world's 19th-largest dairy producer, according to company documents.
Three month stock chart for George WestonThe federal government's Competition Bureau must approve the transaction since, with the deal, Saputo will become even more dominant in the dairy sector.
Saputo already owns Baxter and Dairyland and, as a large cheese maker, will be able to further control its input costs.
Canada's dairy producers posted sales of $5.2 billion in 2007, according to Statistics Canada.
Saputo saw sales in its existing dairy division, which includes yogurt and other products, reach $4.9 billion last year.
Weston's gainToronto-based Weston will earn $390 million from the sale after tax. Weston has been dealing with a company-wide slump in revenues, which dropped 1.2 per cent in its fiscal 2007 year compared with the year prior.
Neilson posted annual sales in the range of $600 million and added about $50 million to Weston's operating income.
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