Saputo has agreed to sell an 80% stake in its dairy division in Argentina to regional major Gloria Foods.
The business forms just 7% of Saputo’s group revenue and is significantly exposed to FX effects, making it a volatile component of its international portfolio.
The business is valued at around US$630m and Saputo says its retained 20% stake will net US$400m in after‑tax proceeds.
The deal includes two factories and the local brands La Paulina, Ricrem and Molfino, with Gloria Foods set to continue manufacturing select items for Saputo.
Carl Colizza, Saputo president and CEO, said the decision “reflects our efforts to refine our global footprint for long‑term growth.”
“The value to be realized recognizes both the operational excellence of the team and the market strength of the brands they built,” he added.
“This divestiture enhances our financial flexibility and supports targeted reinvestment in platforms that offer the highest growth opportunities, while allowing us to maintain a portfolio of Argentina‑sourced products for our international markets.”
The deal is expected to be finalized in the first quarter of fiscal 2027.
Shedding an underperformer
Saputo is the top dairy processor in Argentina. In the last full fiscal year, the Argentina dairy division was the only one that didn’t improve performance across the group as the unstable economic environment with high inflation led to higher production and milk prices.
During the current fiscal year, milk prices have decreased, but the economy remains volatile. Hyperinflation and currency devaluation impact Saputo’s balance sheet quarter after quarter. This instability means the dairy processor must make accounting adjustments to maintain comparability, which in the third quarter of FY26 reduced reported revenue from Argentina.
All this suggest that despite improving operational conditions, Argentina’s volatile economy makes the country a tough market to operate in.
Gloria Foods expands into Argentina
Gloria Foods has grown its influence in Latin America through strategic acquisitions. It acquired Fonterra’s Chile arm Soprole in 2022 and took over Nestlé’s dairy and juices business in Ecuador in 2024.
The deal with Saputo allows it to expand into a new market and gain production capabilities in ingredient manufacture, including sports nutrition solutions.
On the food side, the company would take over well-known local brands, particularly heritage brand La Paulina which has a strong household penetration and retail branded share position.
In recent years, La Paulina consolidated its position as the main imported brand in Brazil and LATAM region, with Saputo expanding the brand into new test markets.
