Canadian dairy company Saputo has entered an agreement to acquire the Australian dairy business of Murray Goulburn (MG) for approximately $1bn on a debt-free basis.

The completion of the transaction is subject to MG shareholders’ approval and customary conditions and is expected to take place in the first half of next year.

MG has been engaged in the production of a wide range of dairy products, including drinking milk, milk powder, cheese, butter and dairy beverages, as well as a range of ingredient and nutritional products such as infant formula.

MG currently offers its products to the retail and foodservice industries across the globe under Devondale, Liddell and Murray Goulburn Ingredients brands.

MG has a workforce of nearly 2,300 employees and operates eleven manufacturing facilities across Australia and China.

"Saputo anticipates that the acquisition of MG would further strengthen its dairy activities and presence in the Australian market."

Saputo anticipates that the acquisition of MG would further strengthen its dairy activities and presence in the Australian market.

The Canadian dairy firm also plans to make further investments in order to further enhance MG’s business in domestic and international markets.

Moelis and Company is serving as financial advisor to Saputo, while Ash St Partners and Clayton Utz are acting as legal counsels.

National Bank Financial and BMO Capital Markets are co-lead arrangers and joint bookrunners.

Saputo is engaged in the production and distribution of a wide array of dairy products, including cheese, fluid milk, extended shelf-life milk, as well as cream, cultured, and dairy products.