Italy's Newlat Food has agreed to buy Princes for 700 million pounds ($892 million) to add the British company's tinned fish and Napolina sauces to its range and create the food sector's first Milan-based "unicorn" - or billion-dollar startup.

Newlat's shares were up 8.2% at 0915 GMT.

The group plans to rebrand itself as New Princes, with expected consolidated turnover of about 3 billion euros ($3.25 billion) and consolidated equity of more than 700 million euros, Newlat said.

"Newlat Food will become the largest food company listed on the Milan Stock Exchange, reinforcing its role as a key international player," Chairman Angelo Mastrolia said in a statement.

Newlat Food, owned by the Newlat Group, makes pasta, milk and dairy, instant noodles and bakery products.

Princes sells tinned fruit and fish under its own name, and has other brands including Flora sunflower oil and the Napolina range of Italian-style tomato sauces and cooking ingredients.

It traces its roots back to 1880 when it was founded as a fish importer in Liverpool, northwest England. It has been owned by Mitsubishi Corporation since 1989.

In February, Newlat said it had halted talks to buy Princes after Mitsubishi rejected a proposal, but added it remained open to a deal. Sky News reported in December that British buyout firm Epiris and Newlat were competing for the deal.

Newlat said it would pay 650 million pounds in cash, plus 50 million pounds from Newlat Group's sale of its shares, to Mitsubishi.

It added it would receive a 200 million euro loan from Newlat Group and a 300 million euro loan from a pool of international banks to finance the purchase.

UniCredit and BNL BNP Paribas acted as global coordinators and bookrunners for the loan. The two banks and Equita also acted as financial advisers for the Princes deal, which Newlat expects to complete by the end of July.

New Princes will aim for a net debt to core profit (EBITDA) ratio of one by the end of 2026, and an average annual free cash flow of over 100 million euros between 2024 and 2028, Newlat said, adding the group will present its 2030 combined business plan on June 4.

($1 = 0.7849 pounds)

($1 = 0.9219 euros)

(Reporting by Alessandro Parodi, Philippe Leroy Beaulieu; Editing by Kirsten Donovan and Mark Potter)