Lactalis buys Nestle Malaysia's chilled dairy business in $40 million deal

FILE PHOTO: Logo of the dairy group Lactalis at a food exhibition in Villepinte, near Paris, France, October 17, 2016. REUTERS/Charles Platiau/File Photo

PARIS (Reuters) - Lactalis, the world's largest dairy firm, said it had agreed to buy the chilled dairy business of Nestle NESN.S in Malaysia in a deal worth around $40 million.

Nestle Malaysia NESM.KL said earlier that it expected the sale to Lactalis for 155.3 million Ringgit ($37 million) to result in a one-time gain of about 27 million Ringgit over 2018 and 2019.

Nestle’s chilled dairy business in Malaysia generates revenues of 21 million euros ($24 million), said Lactalis, which is a privately-held French company.

The deal, which will take effect next January, follows the earlier acquisition by Lactalis of the Stonyfield organic yoghurt brand from Danone DANO.PA and the purchase of siggi's, a U.S.-based maker of Icelandic yoghurt.

Lactalis was at the center of an earlier health crisis when a salmonella outbreak at a Lactalis milk factory last year led to dozens of babies falling ill.

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta