Saputo to sell majority stake in Argentina operations

Mr. Carl Colizza reports SAPUTO ENTERS AGREEMENT TO DIVEST MAJORITY STAKE IN ITS ARGENTINA OPERATIONS, ENHANCING STRATEGIC FOCUS AND CAPITAL FLEXIBILITY Saputo Inc. has entered into a definitive agreement with Gloria Foods, the dairy and food holding company of Grupo Gloria, to sell an 80-per-cent interest in its dairy division (Argentina), valuing the business at an enterprise value of approximately $855-million ($630-million (U.S.)). With its retained 20-per-cent ownership interest, the company expects to receive net proceeds, after tax, of approximately $543-million ($400-million (U.S.)), subject to certain customary adjustments. The closing of the transaction is expected to occur in the first quarter of fiscal 2027, subject to certain customary closing conditions, including the receipt of applicable regulatory approvals. The transaction includes two manufacturing facilities, as well as local brands, including La Paulina, Ricrem and Molfino. Following the closing, the business will continue to manufacture select items on behalf of Saputo. Over the last four quarters, the dairy division (Argentina) generated approximately $1.2-billion of revenues, which represented approximately 7 per cent of consolidated revenues. "Today's announcement reflects our efforts to refine our global footprint for long-term growth. The value to be realized recognizes both the operational excellence of the team and the market strength of the brands they built," said Carl Colizza, president and chief executive officer. "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." "We are profoundly grateful to our colleagues in Argentina for their passion, dedication and contributions to Saputo's success, and we look forward to seeing these strong assets and brands continue to thrive under new ownership." The company will continue to take a balanced approach to capital allocation. This framework supports organic growth while enabling strategic investments and returning capital to shareholders with a focus on share repurchases in the near term. About Saputo Inc. Saputo, one of the top 10 dairy processors in the world, produces, markets and distributes a wide array of dairy products of the utmost quality, including cheese, fluid milk, extended-shelf-life milk and cream products, cultured products, and dairy ingredients. Saputo is a leading cheese manufacturer and fluid milk and cream processor in Canada, a leading dairy processor in Australia, and, prior to the contemplated divesture, the top dairy processor in Argentina. In the United States, Saputo ranks among the top three cheese producers, and is one of the top producers of extended-shelf-life and cultured dairy products. In the United Kingdom, Saputo is the leading manufacturer of branded cheese and dairy spreads. In addition to its dairy portfolio, Saputo produces, markets and distributes a range of dairy alternative products. Saputo products are sold in several countries under market-leading brands, as well as private-label brands. Saputo is a publicly traded company and its shares are listed on the Toronto Stock Exchange under the symbol SAP. We seek Safe Harbor.