Quebec-based dairy co-operative Agropur has reached an agreement with the grocery chain Sobeys for the purchase of dairy processing activities as well as long-term supply agreements.
The transaction, which is worth $356m, includes the purchase of four plants, the licensing of the Lucerne trademark to Agropur for the production and distribution of fluid milk and cream and long term supply agreements that will come into effect upon the transfer of the facilities to Agropur and expiry of current supply agreements.
Referring to the new strategic partnership, Serge Riendeau, president of Agropur, said: “We are very excited about this transaction. The dairy industry, both Canadian and worldwide, is very competitive. This transaction will confirm our leadership position in the Canadian milk industry, for the greater benefit of all of our members‑producers and owners.
“This transaction fits perfectly with our growth strategy. It will allow us to better serve our customers and consumers from coast to coast. Thanks to the business related to these assets and the renewal of certain contracts, the acquisition of the plants represents revenues totaling over $400 million and sees us accelerate our growth in the Canadian market,” added Robert Coallier, CEO of Agropur.
Founded in 1938, Agropur has become Canada’s biggest dairy co-operative, with sales of more than $3.8bn, over 3,500 dairy producers and 6,500 employees. Agropur processes more than 3.4bn litres of milk per year in its 32 plants across North America and has a varied line of products. Last year Agropur merged with Farmers Co-operative Dairy, in order to serve the customers of both co-operatives on a national basis.