Saputo to sell majority stake in Argentina operations

Executive Summary

• Saputo Inc. entered a definitive agreement to sell an 80 % interest in its Argentine dairy division to Gloria Foods (Grupo Gloria) for an enterprise value of ~US$855 million, generating net after‑tax proceeds of approximately US$543 million.
• The transaction includes two manufacturing facilities and key local brands (La Paulina, Ricrem, Molfino); Saputo will retain a 20 % stake and continue to manufacture select items for the company.
• Closing is expected in Q1 FY2027, subject to customary conditions and regulatory approvals, enhancing Saputo’s capital flexibility and supporting targeted reinvestment and near‑term share repurchases.

Key Details

• Transaction Structure: Sale of 80 % equity interest; Saputo retains 20 % ownership.
• Valuation & Proceeds: Enterprise value ≈ US$855 million (CA$630 million); net after‑tax proceeds to Saputo ≈ US$543 million (CA$400 million), subject to customary adjustments.
• Assets Included: Two Argentine manufacturing facilities and brands La Paulina, Ricrem, Molfino.
• Operational Impact: The Argentina dairy division generated ~US$1.2 billion in revenue over the last four quarters (~7 % of Saputo’s consolidated revenues).
• Closing Timeline: Expected in the first quarter of fiscal 2027, pending standard closing conditions and regulatory approvals.
• Post‑Closing Arrangement: The divested business will continue to manufacture select products on behalf of Saputo under existing agreements.
• Strategic Rationale: Enhances financial flexibility, allows reinvestment in higher‑growth platforms, and supports a balanced capital allocation approach emphasizing organic growth, strategic investments, and share repurchases.

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…” – Carl Colizza, President & CEO, Saputo Inc.