Dean Foods to sell Morningstar dairy to Canada’s Saputo for $1.45 bn

Dean Foods Co, the largest US dairy products maker, yesterday agreed to sell its Morningstar dairy division to Canadian rival Saputo Inc for $1.45 billion in cash.

Dallas, Texas-based Dean Foods, which operates three divisions - Fresh Dairy Direct, WhiteWave and Morningstar - had announced in September that it had decided to explore a transaction that may result in the sale of the Morningstar business.

Reuters had reported in October that the bidders in the auction for Morningstar would include Montreal-based Saputo, Michael Foods, Minnesota's largest privately held company, Mexican dairy company Grupo Lala and private equity firm Apollo Global Management.

Morningstar is a leading warehouse delivery dairy business that produces and sells traditional and specialty items, including cultured dairy products, ice cream mixes, coffee creamers, aerosol whipped toppings, traditional and value-added milks, and blended iced beverages to retailers and food-service providers nationwide.

It operates 10 manufacturing facilities located in nine states and generated sales of $1.3 billion in 2011, or 10 per cent of Dean Foods' total revenue of $13.05 billion.

Saputo said that the acquisition would complement the activities of its US subsidiary Saputo Dairy Products Division and also add Morningstar's nationwide manufacturing and distribution network. It will also expand Saputo's product range in the US and help it in future acquisitions.