Saputo said crisis presented "silver lining" of M&A opportunities

Saputo said crisis presented "silver lining" of M&A opportunities

Saputo, the international dairy group, believes there will be more opportunity for acquisitions in the wake of the Covid-19 outbreak.

The Canada-based company, which also has operations in the US, Latin America, Europe and Australasia, told investors yesterday (26 March) it is already eyeing M&A opportunities to add to a number of recent deals.

"Coming into this crisis, some of our competitors were already on very thin ice. Perhaps this might just take them over the edge. So I think that there will be, coming out of this, an increased opportunity for M&A," Lino Saputo Jr., Saputo's CEO, said.

"I think the great fortune we have is that we can pick and choose the ones that we think will fit our strategy and be able to buy them at reasonable prices, and be able to continue to develop our business as we had before," CEO Saputo said. "So if I think of a silver lining, to me, that is a silver lining."

He added that "further consolidation in the US would be really, really interesting to us", with the business eager to seize upon any opportunities in foodservice or on the "industrial" side.

"So we're keeping our ears to the ground to see if potentially, there could be opportunity for further consolidation there."

In a detailed briefing with analysts, Mr Saputo and CFO Maxime Therrien discussed the early impacts the group was seeing from the coronavirus outbreak, including on inventory, on retail sales and on the company's business in the foodservice channel.

CEO Saputo said: "I have to say our teams are really stepping up to this challenge. From a sales perspective, we need to make sure that we are there for our customers when it's most convenient for them. We have the fortune that we've got financial strength, so we will take the right decision at the right time."

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