Arla is selling milk drinks business Crediton Dairy in a management buyout.
The sale of the profitable business was a condition required by the European Commission in approving the merger with Milk Link in October.
A consultation of employees has begun and the sale will go through when final EC approval comes through. Arla Foods amba expects the sale to be completed by the end of June 2013.
The buyout team, led by former Milk Link chief executive Neil Kennedy and former Milk Link group finance director Tim Smiddy, said it will provide “a strong platform for its future growth and development”.
Mr Smiddy said the focus will be on growing the flavoured and functional milk business and the British long-life label.
“Crediton Dairy has strong growth potential based on its self-contained and wel-invested manufacturing facility, growing customer base, established range of products and brands and skilled and committed workforce. Ideally located in one of the country’s largest milk fields, the business will benefit from a milk supply agreement with Arla and in the longer term we will seek to recruit our own dedicated group of farmers,” he said.