DAIRY Crest has agreed to sell its dairies operations to the Muller UK & Ireland Group for £80m cash.

Yesterday's announcement said the deal - which has to be approved by shareholders and competition authorities - was in the best interests of consumers, customers, dairy farmers, employees and shareholders.

After completion Dairy Crest will focus on its cheese, butter and spreads businesses, which together recorded revenues of £442m and profits of £56.1m in the year ending in March. It includes market leading Cathedral City, Davidstow, Clover, Country Life and Frylight one calorie cooking spray.

It will also continue to develop whey-based products and fast growing global infant formula market and buy milk direct from around 400 supplying farmers for its Davidstow creamery. It will keep its manufacturing sites at Davidstow, Nuneaton and Frome; Kirkby and Erith and its spreads and spray oil manufacturing plants.

Muller-Wiseman has today confirmed that they’ve acquired the liquids' part of Dairy Crest for Milk glasses_275_288£80million.

This comprises its fresh milk, cream, flavoured milk including the FRijj brand, bulk butter and milk powder businesses.

Dairy Crest have retained the cheese and spreads part of the business.

Muller Wiseman Milk Group members and Dairy Crest Direct will shortly receive letters outlining the acquisition plans and the rationale behind the move.

NFU dairy board chairman Rob Harrison said: “I am sure that members who supply Dairy Crest will have concerns about the acquisition announced today. We are reassured that all contracts will be transferred to Muller-Wiseman, and as more information becomes available, we will update our members immediately. However, I see this as a positive step in building an increasingly sustainable dairy sector and there are synergies between Muller-Wiseman’s existing business and the planned acquisition.”

NFU President Meurig Raymond said: “I have been pleased to see the investment that Muller-Wiseman has made in the UK dairy industry over recent years. This acquisition adds to that portfolio and demonstrates their commitment and confidence in the long term prospects of UK dairying.

“Milk processors along with milk producers have faced a challenging period and consolidation has been a constant characteristic of UK dairying. We have a good working relationship with all parties and we will ensure that our members concerns are addressed in the process.”