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UPDATE 2-Lactalis expands in U.S. yogurt market with siggi's deal

* Lactalis to buy fast-growing yogurt brand siggi's

Emmi to sell 22 pct stake

* Siggi's will continue to operate from NYC office (Adds context with other recent deals, seller of stake)

By Thyagaraju Adinarayan and Martinne Geller

Jan 5 (Reuters) - French dairy firm Lactalis has agreed to buy siggi's, a U.S.-based maker of Icelandic-style skyr yogurt for an undisclosed price, its second deal in six months to tap Americans' growing taste for healthier yogurt.

The purchase, announced on Friday, is the latest upstart company to be bought by a multinational grappling with a slowing packaged food market as consumers seek fresher, less processed food.

Siggi's - with the tagline "simple ingredients, not a lot of sugar" - says its yogurts are at least 25 percent less sugary than leading flavored brands.

Swiss milk processor Emmi owns 22 percent of siggi's and said it would sell its stake to Lactalis. It said the sale would result in a mid double-digit million Swiss franc profit gain this year.

Lactalis and Emmi declined to comment further on deal value and siggi's was not immediately available.

Icelandic entrepreneur Siggi Hilmarsson started selling his yogurt in 2006, after moving to New York and finding local varieties too sweet. It is now the country's tenth-largest yogurt brand, according to Euromonitor International.

Siggi's sales grew 50 percent last year, the company said, outperforming an overall U.S. yogurt market worth $8.8 billion that shrank for the second straight year in 2017 after being boosted previously by the rising popularity of Greek yogurt.

The leading brand is Chobani, founded by Hamdi Ulukaya, also an immigrant to the United States, followed by Danone's Dannon and General Mills' Yoplait.

Lactalis, the world's largest cheese maker, known for its President brand, agreed to buy the Stonyfield brand of organic yogurt from Danone for $875 million in July, to ease that company's purchase of organic food group WhiteWave.

There have been a string of health-minded food deals announced in recent months, including the purchases of Amplify Snack Brands by Hershey's and Sweet Earth by Nestle.

Siggi's will continue to operate from its New York City office and remain a standalone company under the leadership of Hilmarsson, Lactalis said in a statement.

"Our core values of clean ingredient label and less sugar will remain 100 percent unchanged. Consumers everywhere are actively trying to reduce sugar in their diets so our offering has a global relevance," Hilmarsson said.

Privately held Lactalis is one of the world's largest dairy companies, reporting annual sales of around 17 billion euros ($21 billion).

($1 = 0.8284 euros)

($1 = 0.9760 Swiss francs) (Reporting by Thyagaraju Adinarayan in Gdynia; Editing by Mark Potter and Elaine Hardcastle)