Shares in Canadian dairy giant Saputo rose 3.5% on Friday amid rumours that the company may be interested in acquiring assets of US dairy Land O’ Lakes.

Saputo is believed to be eyeing the dairy products assets of Land O’ Lakes, which may be looking to divest some of its cheese assets in a bid to reduce debt, reported Reuters.

One analyst said Saputo had the strongest balance sheet in the North American cheese industry and would face little competition for the Land O’ Lakes assets. Saputo could even buy Land O’ Lakes’ entire US cheese business if it was available, the analyst added.

Saputo announced last week that it has made a preliminary agreement to acquire Molfino Hermanos, Argentina’s third-largest dairy processor, for US$50.8m.