Saputo has won the bidding for Murray Goulburn Co-operative which is Australia's largest milk processor.
It said today that it will take out a new bank loan to pay for the $625-million purchase.
If Saputo decides to buy all of the remaining business, including debts and liabilities, it would cost about $1 billion.
Murray Goulburn got into financial difficulty when it aggressively pursued expansion into Asian markets.
Saputo will be the dominant dairy in Australia because it also owns Warrnambool Cheese Butter.
It is by far the largest dairy company in Canada at roughly twice the size of second-place Agropur cooperative.