The Lala Group’s Board of Directors has agreed to propose to company shareholders the acquisition of up to 100 percent of the shares of Brazilian dairy giant, Vigor Alimentos, S.A. and the shares of Itambé Alimentos, S.A. for an implied value of R$5,725m (US$1.84bn).

Earlier this week, reported how the Mexican-based Lala Group, was looking to seal a deal to buy control of Vigor Alimentos with a Board of Directors meeting scheduled to finalize the acquisition.

It said in a statement that a proposal to acquire Vigor from investment holding company J&F Investimentos SA, as well as a borrowing plan and potential share offering, would go before the Board.

Today (Aug 4), the Group has further announced that as a first step towards completing the transaction, Lala, FB Participações and JBS S.A. entered into a share purchase agreement pursuant to which Lala will acquire, subject to its terms and conditions, 91.99% of the shares of Vigor.

In addition, as part of the transaction, Lala may acquire from Arla Foods International an additional 8 percent of Vigor's shares, increasing Lala's participation to 99.99 percent.

The transaction is subject to certain approvals by Grupo Lala's shareholders' meeting, governmental authorizations, shareholder agreement and other contractual conditions.

Substantial provisions for a successful integration and mitigation of risks have been included in the share purchase agreement.

Financing for the transaction will include a bridge loan, followed by a combination of long-term debt and additional equity of approximately US$550 million, of which an estimated US$315 million will be committed by LALA's current shareholders, adds the group.