Wed, 25 Mar 2015 | DIVISION SALE
Despite news that the UK competition authority is taking a closer look, the sale of Dairy Crest's milk business to Müller is still on track, their chief executive has said.
The UK firm announced last November that it would be selling its loss-making milk operation to German rival Müller for £80 million. Dairy Crest said it would focus its efforts on its more profitable cheese and spreads businesses.
The deal has now been referred back to the UK Competitions and Markets Authority (CMA) by the European Commission for investigation, which could push the completion of the sale into the second half of 2015.
Dairy Crest chief executive Mark Allen said: “This transaction will be a positive development for both Dairy Crest and the UK dairy industry as a whole, delivering economies of scale that will help to create a more sustainable UK dairy sector that is better placed to compete on the global stage.
“It has always been our preference for the transaction to be reviewed in the UK, so we welcome this referral back to the CMA as a positive step.”
At the time the deal was announced, Dairy Crest explained that it was suffering financially due to the pressure to cut prices as supermarkets were offering low prices for milk to draw in customers.
Analysts have suggested that the sale could create a greater competitor to Arla, which produces around 3.5 billion litres of milk, much higher than the 1.3 billion produced by Dairy Crest.
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