Canadian dairy firm Saputo has agreed to pay $1.45 billion for Dean Foods' Morningstar dairy business.
Dean announced plans to offload the ice cream mixer, cultured dairy products, coffee creamer and whipped topping unit in September after its margins were squeezed by higher commodity costs. The company also disposed of part its WhiteWave soy and dairy business earlier this year and is likely to sell the rest of the unit in the near future.
“Dean Foods will use substantially all of the net proceeds from the sale of Morningstar to significantly reduce outstanding debt, resulting in a stronger balance sheet and increased flexibility to execute against our strategies for our core dairy business,” said Gregg Tanner, Dean Foods’ chief executive.
The firm will raise $887 million from the sale after tax and expenses.
On Monday, Dean announced that it would break up the group to narrow its portfolio.
