May 27 (Reuters) - Italy's Newlat Food said on Monday it would buy British food group Princes for 700 million pounds ($892 million) to create the first Milan-based "unicorn" - or billion-dollar startup - in the food sector.

After closing the deal, the group will rebrand itself as New Princes and will have a consolidated turnover of about 3 billion euros ($3.25 billion) and consolidated equity of over 700 million euros, Newlat said in a statement.

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

The group said it expects 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.

It will present its 2030 combined business plan on June 4, Newlat added.

The deal, which Newlat expects to complete by the end of July, includes the sale of 50 million pounds worth of Newlat shares to Mitsubishi Corporation, which owns Princes, Newlat said in a statement.

Milan-listed shares in Newlat were up around 8.5% in early trade.

($1 = 0.7849 pounds)

($1 = 0.9219 euros) (Reporting by Alessandro Parodi, Philippe Leroy Beaulieu; Editing by Kirsten Donovan and Mark Potter)