Lactalis agrees £988m deal for Cathedral City owner Saputo

French dairy giant Lactalis is to buy Saputo’s UK dairy business in a deal worth about £988m, bringing some of Britain’s biggest cheese and butter brands under the ownership of the world’s largest dairy company.

The deal, announced on Friday (14 August), includes Cathedral City, Davidstow, Wensleydale Creamery, Country Life, Clover and Utterly Butterly.

Completion is expected by the end of March 2027, subject to regulatory approval.

For dairy farmers, the acquisition will bring a new owner to a business employing about 1,300 people across five UK production sites at Hawes, Davidstow, Nuneaton, Kirkby and the Isle of Bute.

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The division generated revenues of about €800m (£683m) in its latest financial year, with 94% of sales made in the UK.

The move follows Saputo’s 2019 acquisition of Dairy Crest, which brought brands including Cathedral City and Country Life into Canadian ownership.

Saputo subsequently expanded its UK cheese operation by acquiring Wensleydale Dairy Products in 2021.

Lactalis said the acquisition would make it a leading UK supplier of cheddar and butter and spreads.

Chairman Emmanuel Besnier said bringing the brands and expertise into the group would strengthen its UK position and commitment to high-quality dairy products.

The deal also adds significant cheddar-making capacity to a Lactalis business that already has four UK manufacturing sites and works with 139 supplying farmers, according to its latest sustainability report.

Sustainable sourcing

Lactalis has previously highlighted sustainability payments, carbon audits and herd-health initiatives within its milk supply arrangements.

The acquisition comes as the UK dairy sector continues to see consolidation among processors.

The Competition and Markets Authority will consider the transaction before completion.

Saputo’s Davidstow operation receives milk from nearly 300 farmers across Cornwall, Devon, Somerset and Dorset through farmer organisation Davidstow Creamery Direct, which supplies more than 500m litres annually.