The Kraft Heinz Company has signed a definitive agreement to divest its Canadian natural cheese business to Parmalat for C$1.62bn (approximately $1.23bn).

The transaction covers the sale of natural cheese brands Cracker Barrel, P’tit Quebec and aMOOza in Canada.

Following regulatory approval, the deal is expected to close in the first half of 2019.

Kraft Heinz CEO Bernardo Hees said: “We’re excited about what this transaction means for our future growth and business in Canada.

“We also believe Parmalat is uniquely positioned to advance the natural cheese business given their experience and focus on the dairy industry. At the same time, we can focus on the segments and categories where we have stronger brand equity, competitive advantage and greater growth prospects.”

“Under this agreement, Canada partially opened its domestic market to US firms.”

In addition to the brands, Kraft Heinz Canada will sell the production facility at Ingleside, Ontario, and transfer around 400 employees to Parmalat.

Kraft Heinz will continue to own its other cheese brands, including Philadelphia, Cheez Whiz and Kraft Singles. These products are processed at Mount Royal facility in Quebec, where the firm employs around 900 people.

The transaction comes following the signing of the new United States-Mexico-Canada Agreement (USMCA), reported Reuters.

Under this agreement, Canada partially opened its domestic market to US firms.

RBC Capital Markets served as the exclusive financial adviser to Kraft Heinz Canada for this transaction, while Fasken Martineau DuMoulin acted as legal adviser.

Across the country, Kraft Heinz employs around 2,000 people in its facilities. Recently, the company acquired Vancouver-based coffee brand Ethical Bean.