10/26/2017 14:47 EDT | Updated 10/26/2017 15:00 EDT

Saputo reaches deal to acquire Australian dairy firm for $1.29 billion

Montreal-based dairy giant Saputo Inc. announced Thursday it has reached a $1.29-billion agreement to acquire Australia's Murray Goulburn Co-Operative Co. Limited.

The Australian dairy company produces products for the international market under the Devondale, Liddells and Murray Goulburn Ingredients brands.

Murray Goulburn makes a variety of dairy products including milk, milk powder, cheese, butter and infant formula.

Saputo said the agreement has been unanimously recommended by Murray Goulburn's board of directors and is subject to shareholder approval.

The Australian Competition and Consumer Commission also needs to approve the deal.

Saputo (TSX:SAP) said it expects the transaction to close in the first half of 2018.