LONGUEUIL, QUE. — Agropur Cooperative has reached agreement to acquire Sobeys’ dairy manufacturing plants in Western Canada and supply milk, yogurt, and ice cream to Sobeys, Safeway and IGA stores in the West under long-term supply arrangements. The transaction is valued at $356 million and includes:
• The purchase of four plants: two located in Edmonton, Alta., (milk - ice cream), one in Winnipeg, Man., (milk), and one in Burnaby, B.C., (milk);
•The licensing of the Lucerne trademark to Agropur for the production and distribution of fluid milk and cream; and
•Long-term supply agreements that will come into effect upon the transfer of the facilities to Agropur and expiry of current supply agreements.
“We are very excited about this transaction,” said Serge Riendeau, president of Agropur. “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.”
Robert Coallier, chief executive officer of Agropur, said the transaction “fits perfectly” with the cooperative’s growth strategy.
“It will allow us to better serve our customers and consumers from coast to coast,” Mr. Coallier said. “Thanks to the business related to these assets and the renewal of certain contracts, the acquisition of the plants represents revenues totaling over $400 million and sees us accelerate our growth in the Canadian market.”
Sobeys’ dairy activities have 281 employees and process more than 160 million liters of milk per year. The company acquired the dairy manufacturing facilities as part of its November 2013 purchase of Canada Safeway.
The transaction comes a little more than three months after the boards of directors of Agropur Cooperative and Dairytown Products Ltd., Sussex, New Brunswick, agreed to merge the two companies. Dairytown is a regional processor of butter, skim milk powder and custom milk powder blends. Last fall, Agropur acquired the assets of Fromagerie Damafro, a producer of cheese and a Canadian leader in the production of Camembert and Brie.