The UK arm of Danish dairy group Arla Foods has been cleared for its £155m takeover of Express Dairies.

The deal brings the number of milk suppliers down from four to three. The merged company, Arla Foods UK, is now the UK’s biggest fresh milk supplier, with 38% of the market to the multiples.

Competition Commission minister Gerry Sutcliffe said that without the merger “Express’ competitive position would weaken”.

He noted that with continued over-capacity in the industry, the move would give the multiples flexibility to switch their supplies between processors.

Sutcliffe said the deal would not operate against the public interest or lead to a lessening in competition in the supply of fresh processed milk, nor affect the doorstep market.

Chairman of Express Dairies, Sir David Naish, was delighted with the decision. He said: “We have long said that the UK dairy industry requires rationalisation and the merger of Express and Arla UK will go a long way to achieving this.”