UPDATE 5-Saputo to buy Dean Foods Morningstar unit for $1.45 bln

Mon Dec 3, 2012 5:30pm EST
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* Deal seen boosting Saputo earnings immediately

* Sale brings Dean Foods closer to breakup

* Shares of both Dean Foods and Saputo up (Adds background on ConAgra, adviser, closing share prices)

By Martinne Geller and Allison Martell

NEW YORK/TORONTO, Dec 3 (Reuters) - Saputo Inc will buy Dean Foods Co's Morningstar division for $1.45 billion to widen its product range and increase its U.S. presence, the Canadian dairy products maker said on Monday.

The Morningstar deal is the second in a week for a maker of private label foods, or products that stores brand as their own, which are often popular when consumers' budgets are tight. Last week, ConAgra Foods Inc said it would buy Ralcorp Holdings for $5 billion.

The sale of Morningstar, which sells coffee creamers, ice cream mixes and other dairy products to retailers and restaurants, will be a big step in the breakup of Dean, which is spinning off another business into WhiteWave Foods Co.

After the sale of Morningstar and the separation of WhiteWave, which sells Silk soy milk and Horizon organic milk, Dallas-based Dean will sell mostly regular milk, which is a difficult business with declining sales volumes, volatile commodity costs and slim margins due to intense price competition from store brands.

Montreal-based Saputo, which has expanded its U.S. cheese business with several smaller acquisitions, is getting Morningstar at an attractive price, analysts said.   Continued...