The UK government has approved a merger between Express Dairies and Arla Foods' UK unit.

The UK's competition authorities concluded that such a merger was not expected to operate against public interest and would not lead to a substantial lessening in competition in the supply of fresh milk, reported AFX News.

In June, the European Commission referred part of the proposed merger to UK competition authorities, having approved the rest of the deal itself. The UK regulator was given the task of assessing the impact of the merger on the markets for the supply of processed fresh milk in the UK.

Express Dairies chairman David Nash welcomed the decision, saying the merger would create a substantially stronger group.

"We have long said that the UK dairy industry requires rationalisation, and the merger of Express and Arla UK will go a considerable way towards achieving this," he was quoted by AFX as saying.