The European Commission has given the green light to the planned merger of Arla Foods and Milk Link – a deal set to create the UK’s biggest dairy company.
The merger will officially complete on Monday, forging a business with a combined annual turnover of £2bn, with Milk Link’s business folded into Arla’s UK arm.
However, regulatory approval is subject to a commitment made by Arla to sell off Milk Link’s milk drinks business at Crediton, to address Commission concerns over a perceived reduction in competition the UK long-life milk market.
“From now, the existing [Milk Link] milk drinks business will be ring-fenced from the rest of the merged business and as part of its commitment to the Commission, Arla has undertaken to preserve the economic viability, marketability and competitiveness of the business,” the company said in a statement.
As part of its arrangement with the Commission, Arla must make resources available and retain a dedicated senior level management team to ensure it remains viable. Arla will retain its existing long-life milk business based at its Settle creamery.
The group will provide a complete own-label and branded dairy portfolio including butter; Cheddar; continental and territorial cheeses; fresh, flavoured, long-life, extended-life and functional milks; spreads; cottage cheese; and cream.
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