PARIS, Aug 14 (Reuters) - French dairy giant Lactalis

reached an agreement to buy Canadian rival Saputo's ( SAPIF )

unit in Britain in a deal valuing the business at 988 million

pounds ($1.34 billion), the companies said on Friday.

* After the acquisition, Lactalis will become a leader on

the British cheddar, butter and margarine markets, Lacatalis

said in a statement.

* Saputo's ( SAPIF ) British business includes the Cathedral City and

Davistow cheddar brands and Wensleydale Creamery cheese and

Country Life butter as well as the Clover and Utterly Butterly

margarines, added Lactalis.

* Saputo's ( SAPIF ) Britain unit employs 1,300 people and it makes

94% of its sales revenues in Britain, Lactalis said.

($1 = 0.7386 pounds)

($1 = 0.8645 euros)