The £80m sale of Dairy Crest’s dairies operations to Muller Wiseman has taken another step forward.
The Competition and Markets Authority (CMA) is proposing to accept undertakings from Muller that are designed to ensure there is no reduction of competition in the supply of fresh milk to supermarkets in the South West.
This makes it increasingly likely that the deal will go ahead by the end of the year.
The CMA has invited comments from third parties on its proposal to accept Muller’s plans, having originally raised the prospect of a six-month investigation into the implications of the deal.
It has extended its deadline for consideration of the undertakings from 21 August to 19 October but has also said that it may reach a final decision before that date.
Dairy Crest shareholders have already approved the move, which was announced in November 2014 and would see the least profitable part of Dairy Crest offloaded.
About 700 farmers will switch over to Muller if the sale goes through.
We have always believed the sale of our dairies operations is good news for the whole UK dairy sector, which is currently facing significant challenges arising from low dairy commodity returns, “ said Mark Allen, chief executive of Dairy Crest.
“It will deliver economies of scale and cost efficiencies that will underpin investment and help the UK compete more successfully in global markets.
“Today’s announcement that the CMA proposes to accept Muller’s undertakings is a positive step forward and the extended timetable still allows us to complete the sale in 2015.”