London-listed butter and cheese producer Dairy Crest said that its management recommended shareholders accept a takeover bid from Canadian giant Saputo (JOEL SAGET)

London (AFP) – British butter and cheese producer Dairy Crest agreed Friday to a takeover from Canadian giant Saputo worth £975 million (1.1 billion euros, $1.3 billion).

London-listed Dairy Crest said in a joint statement that its management has recommended to shareholders to accept the bid, which is pitched at £6.20 per share. The news however sent the stock jumping above that level.

“Saputo and Dairy Crest announce that they have reached agreement on the terms of a recommended cash acquisition by which the entire issued and to be issued ordinary share capital of Dairy Crest will be acquired by Saputo,” the pair said in a statement.

Founded in 1933, Dairy Crest produces well-known household brands including Cathedral City cheese, Country Life butter, as well as Clover and Utterly Butterly spreads.

The deal will hand Montreal-based Saputo a foothold in Europe one year after it completed the purchase of Australian peer Murray Goulburn.

“Dairy Crest is a leading UK dairy company and the proud manufacturer of Cathedral City, the largest UK cheese brand. Saputo is one of the top ten dairy processors in the world,” added Dairy Crest chairman Stephen Alexander.

“Both companies have built strong positions in the cheese sectors in their respective home markets.

“The acquisition should enable Dairy Crest to benefit from Saputo’s global expertise and strong financial position to fulfil and accelerate its growth ambitions.”

In reaction, the British company’s share price soared more than 15 percent higher to close at £6.40 on London’s second-tier FTSE 250 index, which ended 0.2 percent higher overall.

The firm currently employs 1,100 people in Britain and has annual sales of about £460 million.

“Dairy Crest is an attractive platform for Saputo and fits well within our growth strategy,” said Saputo Inc. chairman and chief executive Lino A. Saputo Jr.

“We believe that under Saputo ownership, Dairy Crest will be able to accelerate its long-term growth and business development potential and provide benefits to Dairy Crest’s employees and stakeholders.”

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