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Saputo to buy Australian dairy firm Murray Goulburn for $488-million

Head office and manufacturing company Saputo Inc., seen in Montreal, on Nov. 14, 2013.

Christinne Muschi/The Globe and Mail

Murray Goulburn Co-operative, Australia's largest milk processor, on Friday said it agreed to a buyout from Canadian dairy company Saputo Inc worth up to A$637.8-million ($488-million).

Murray Goulburn said Saputo would pay between A$1.10 and A$1.15 per share, compared to its A$2.10 issue price when it listed in 2015.

A total buyout value of A$1.3-billion would include the company's debts and liabilities.

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Murray Goulburn, reeling from an ill-fated Asian expansion, said in August it was considering approaches from suitors who were interested in buying the cooperative as a whole or some of its assets.

Rival Bega Cheese Ltd on Thursday said it had pulled out of the race to buy Murray Goublurn, leaving the dairy processor to choose from a string of international investors, including Fonterra and Saputo.

"MG has reached a position where, as an independent company, its debt was simply too high given the significant milk loss," Chairman John Spark said in Friday's statement.

Saputo, which already owns Australia's Warrnambool Cheese Butter, said in a statement the buyout will complement its existing Australian portfolio. It will fund the deal with a new bank loan.

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