Mexican dairy company Grupo Lala has agreed to acquire Brazil-based dairy and food firm Vigor Alimentos for BRL 5.725 bn ($1.84bn).
The deal follows approval by Grupo Lala’s board of directors, with the favorable opinion of the company’s audit and corporate practices committee.
Lala will acquire a 91.99% stake of Vigor, and could increase its holding to 99.99% with the addition of 8% interest currently owned by Arla Foods.
The transaction also includes the purchase of directly or indirectly, of up to 100% of the shares of Itambé Alimentos, subject to the exercise of certain rights by Vigor's partner, Cooperativa Central dos Produtores Rurais de Minas Gerais under their existing shareholders' agreement.
The deal is subject to governmental authorizations, shareholder agreements and other inherent contractual conditions.
The transaction will be financed by a bridge loan and a combination of long-term debt and additional equity of about $550m.
Grupo Lala is engaged in the production and marketing of milk and other dairy products for over 65 years. The company has a market value of $4.8bn.
The company operates 22 production plants and 160 distribution centers across Mexico, US and Central America. It employs over 34,000 people.
Lala and Nutri Leche are the two main brands of Grupo Lala. Its products are delivered to nearly 500,000 points of sale.
Vigor, which was established in 1917, has a workforce of more than 7,600 employees, 11 milk collection centers, 14 production plants, 31 distribution centers and 67,000 points of sale in Brazil.
The Brazilian dairy company produces a range of dairy products, including yogurt, cheese and other dairy products which are marketed under the Vigor, Danubio, Faixa Azul, Serrabella, Leco and Amelia brands.
Itambé Alimentos produces powdered milk, condensed milk, milk caramel, yogurt, dairy products and UHT milk, under the Itambé brand.
