THE £80m takeover of Dairy Crest’s milk division by German yogurt maker Müller is set to be given the green light by Britain’s competition watchdog this week.
The approval, by the Competition and Markets Authority, is expected to make the rump of the British company a more attractive acquisition target.
Müller agreed a takeover of Dairy Crest’s milk processing sites and Frijj milkshake brand in November. The deal was scrutinised by the CMA amid concerns that it could drive up the price of a pint of milk.
Following the takeover, most of Britain’s milk processing will be done by two companies, Arla UK and Müller. Experts said the takeover was unlikely to cause an increase in milk prices. Consolidation would make processing more efficient, which would keep a lid on price rises, they said.
The National Farmers’ Union is expected to throw its weight behind the deal this week. Dairy Crest and the CMA declined to comment ahead of the decision.
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City sources said the rest of Dairy Crest, including the Cathedral City cheese and Country Life butter brands, would become a more desirable takeover target.
Lactalis, a French rival, and PAI Partners, a private equity firm, are said to be among firms that have looked at Dairy Crest in the past.
Dairy Crest shares closed at £6.04p on Friday, giving the company a market valuation of £832m.