The CMA has today announced that it has accepted modified undertakings provided by Müller and approved the sale of Dairy Crest’s Dairies operations.
The consideration payable by Müller remains at £80 million subject to previously agreed upward or downward adjustments. Müller has withdrawn its right not to complete the purchase should there be a deterioration of more than £20 million from the agreed level of profitability of Dairy Crest's Dairies operations.
Dairy Crest has agreed to make a one-off payment of £15 million to Müller on completion to help meet the additional cost of the modified undertakings.
The sale will complete on 26 December 2015. Dairy Crest will now finalise its consultation with employees.
Mark Allen, Chief Executive of Dairy Crest, commented:
“We are delighted that the sale is now confirmed and will complete this year.
“This is a transformational moment for Dairy Crest and the wider dairy industry. The deal will help to create a more sustainable UK dairy sector. It will deliver economies of scale and cost efficiencies that will underpin investment in the sector and help the UK to compete more successfully in global markets. Dairy Crest will now be able to focus on growth, through both our branded cheese and spreads operations and new revenue streams from manufacturing products for the fast-growing global infant formula market.
“We will work with Müller to ensure completion is achieved as smoothly as possible.”
Environment Secretary, Elizabeth Truss, said:
“This sale of Dairy Crest's Dairies operations to Müller will provide greater stability for our milk industry and the hard-working farmers who supply it.
“It will also allow Dairy Crest to focus on growth in its cheese and spreads business in the UK, and innovative new products for export to high-growth markets.
“Dairy farmers are a vital part of our £100 billion food and farming industry and today’s decision is welcome news. This deal will encourage further investment in the sector which will in turn enable the UK to compete more effectively internationally.”