Saputo Enters Agreement to Divest Majority Stake in its Argentina Operations, Enhancing Strategic Focus and Capital Flexibility

Executive Summary

• Saputo Inc. entered into a definitive agreement to sell an 80 % interest in its Argentine Dairy Division to Gloria Foods (Grupo Gloria) for an enterprise value of approximately $855 million (~US$630 m).
• Saputo will retain a 20 % ownership stake and receive net proceeds, after tax, of roughly $543 million (~US$400 m), subject to customary adjustments.
• The transaction is expected to close in the first quarter of fiscal 2027, pending regulatory approvals; it includes two manufacturing facilities and brands La Paulina, Ricrem, and Molfino, and will provide Saputo with increased financial flexibility for reinvestment and share repurchases.

Key Details

• Transaction Structure: Sale of 80 % equity interest; Saputo retains 20 % residual ownership.
• Valuation & Proceeds: Enterprise value ≈ $855 m (US$630 m); net after‑tax proceeds to Saputo ≈ $543 m (US$400 m).
• Closing Timeline: Anticipated in Q1 FY 2027, subject to customary closing conditions and regulatory approvals.
• Assets Included: Two Argentine manufacturing facilities; local brands La Paulina, Ricrem, and Molfino.
• Historical Performance: Over the prior four quarters, the Dairy Division generated ~$1.2 billion in revenue (≈7 % of Saputo’s consolidated revenues).
• Post‑Closing Operations: The business will continue to manufacture select items for Saputo under existing agreements.
• Strategic Rationale: Enhances financial flexibility, supports targeted reinvestment in higher‑growth platforms, and enables near‑term share repurchases while maintaining a portfolio of Argentina‑sourced products for international markets.

Notable Quotes

“Today’s announcement reflects our efforts to refine our global footprint for long‑term growth… This divestiture enhances our financial flexibility and supports targeted reinvestment in platforms that offer the highest growth opportunities, while allowing us to maintain a portfolio of Argentina‑sourced products for our international markets.” – Carl Colizza, President & CEO, Saputo

“We are profoundly grateful to our colleagues in Argentina… we look forward to seeing these strong assets and brands continue to thrive under new ownership.” – Carl Colizza