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July 9, 2014

CANADA: Agropur in plants-and-supply deal with Sobeys

Canadian dairy co-op Agropur has struck deals to buy four plants from - and supply a range of products to - Sobeys, one of the country's largest retailers.

By Dean Best

Canadian dairy co-op Agropur has struck deals to buy four plants from – and supply a range of products to – Sobeys, one of the country’s largest retailers.

Agropur said the “strategic partnership” had cost C$356m (US$333.49m) but included “long-term” agreements to supply products including milk and cream. It has also secured the licence to Sobeys’ Lucerne trademark for milk production.

The transaction will also see Agropur supply cheese, yoghurt and ice cream to Sobeys, the retailer added.

Sobeys had acquired the four plants in Edmonton, Winnipeg and Burnaby as part of its takeover of the Canadian assets of US retailer Safeway Inc last year.

“This transaction fits perfectly with our growth strategy. It will allow us to better serve our customers and consumers from coast to coast. Thanks to the business related to these assets and the renewal of certain contracts, the acquisition of the plants represents revenues totalling over C$400m and sees us accelerate our growth in the Canadian market,” Agropur CEO Robert Coallier said.

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