The sale of Dairy Crest Dairies to Muller UK & Ireland will complete in December, following approval by the Competition and Markets Authority.
The acquisition, which includes Dairy Crest’s dairy facilities at Severnside, Chadwell Heath, Foston and Hanworth together with around 70 depots, will complete no later than the end of December 2015.
The decision follows agreement by the CMA that Müller will toll process a nominated volume of fresh liquid milk for fresh milk processor Medina Dairy at the Severnside facility to ensure competition for national multiple tenders in the South West, Wales, the South and the Midlands.
Ronald Kers, Chief Executive of Müller said: “As a family owned company, we aim to invest in businesses where we can add value through our knowledge, scale and entrepreneurial way of operating.
“There is no question that further consolidation is required in the UK fresh milk sector and with this hurdle now cleared, we have an exciting opportunity to create a more competitive, sustainable, efficient and innovative dairy processor in the UK.”
NFU dairy board chairman Rob Harrison said: “The NFU is fully supportive of the cost efficiencies that this acquisition is expected to generate and we consider it to be a positive step in building an increasingly sustainable dairy sector.
“We urge Müller to recognise and work constructively with the producer organisation Dairy Crest Direct, which will stay in place and which includes the 700 former Dairy Crest-supplying farmers. Working with them will secure the best results for all suppliers in the absence of a producer organisation at Müller.
“The profitability of Dairy Crest’s liquid milk business has declined in recent years and this hasn’t helped its supplying farmers. We hope this acquisition will provide those farmers with greater stability.”