The Montreal-based dairy firm said that it is purchasing the company on a debt-free basis financed through a new bank loan.
Murray Goulburn is Australia’s largest milk processor, producing a range of products including drinking milk, cheese, butter and infant formula.
With around 1,900 employees, Murray Goulburn currently operates seven manufacturing facilities across Australia and one in China.
The dairy giant had revenues of around CDN$2.5bn for the year ending June 2017.
Through the acquisition Saputo hopes to expand its presence in the Australian market, strengthening its commitment to strengthening its international presence.
It is currently one of the top ten dairy processors in the world, the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, the top dairy processor in Australia and the second largest in Argentina.
“The Murray Goulburn deal is going to be structurally very significant. Saputo will want to reclaim the milk supplies lost by Murray Goulburn, primarily to Fonterra, who will not want to lose them,” Michael Harvey, a dairy analyst at Rabobank, told Reuters “It sets the scene for a battle of the giants.”