The Office of Fair Trading has cleared the proposed merger of milk producers Milk Link and First Milk.

The two firms proposed the merger in October this year to create a company that would hold a 20% share of the UK cheese market and produce 2.9 billion litres of the UK's 13 billion litres of milk a year.

“We are pleased that the OFT has decided to clear our proposed merger,” First Milk and Milk Link said in a joint statement.

“We continue to make progress with regard to the due diligence work necessary to facilitate both boards endorsing the merger to their members.”