Dairy Crest, whose brands include Cathedral City cheddar and Country Life butter, has agreed to be bought by a Canadian company in a near-£1bn deal.
Saputo, one of the biggest dairy processors in the world, will pay 620p a share for Dairy Crest, valuing the company at about £975m.
The Canadian firm has expanded rapidly in recent years through acquisitions.
The deal is its first in Europe and Saputo said Dairy Crest was an “attractive platform” for UK growth.
Saputo chairman and chief executive Lino Saputo Jr said: “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’s brands
- Cathedral City cheese
- Davidstow cheese
- Country Life butter
- Utterly Butterly
The Canadian firm said that, under its ownership, Dairy Crest would continue to manufacture its products from its existing UK facilities.
It also intends that the management of its UK operations will continue to be based in Surrey, England.
Dairy Crest’s board has unanimously recommended that shareholders accept Saputo’s offer.
The chairman of Dairy Crest, Stephen Alexander, said: “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.”