Agropur signs $356m partnership agreement with Sobeys
summary：Canadian agricultural cooperative Agropur has concluded a strategic partnership agreement with grocery chain Sobeys that includes the purchase of the dairy processing activities as well as long term supply agreements, in a deal worth $356m....
Canadian agricultural cooperative Agropur has concluded a strategic partnership agreement with grocery chain Sobeys that includes the purchase of the dairy processing activities as well as long term supply agreements, in a deal worth $356m.The acquisition includes four plants: two located in Edmonton (AB) (milk - ice cream), one in Winnipeg (MB) (milk) and one in Burnaby (BC) (milk); and the licensing of the Lucerne trademark to Agropur for the production and distribution of fluid milk and cream.
It also includes long term supply agreements that will come into effect upon the transfer of the facilities to Agropur and expiry of current supply agreements.
Agropur president Serge Riendeau said that 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," Riendeau added.
Agropur CEO Robert Coallier said that this transaction fits perfectly with the cooperative's 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 totalling over $400 million and sees us accelerate our growth in the Canadian market," added Coallier.
Sobeys' dairy activities have 281 employees and process more than 160 million litres of milk per year. The purchase is subject to regulatory approvals.