Saputo, Canada's largest dairy firm, is to buy US co-operative Alto in a deal worth US$160m.

Saputo, which is one of the top five cheese producers in the US, said the acquisition would allow the company to achieve a "stronger presence" south of the border.

Alto produces Italian and American-style cheeses, as well as whey products under brand names and private-label.

The acquisition remains subject to the approval of Alto's members and the US competition watchdog but Saputo said the deal should be sealed in March.