The board of Italian dairy group Centrale Del Latte Di Torino has given the go-ahead to a proposed merger with the Florence-based dairy firm Centrale del Latte di Firenze, Pistoia e Livorno – also known as Mukki.

Under the terms of the deal, which is expected to be completed by the end of next September, Centrale Del Latte Di Torino will change its name to Centrale del Latte d’Italia.

Immediately after the merger becomes effective, Centrale del Latte d’Italia said it will spin off Mukki into a new dairy firm based in Florence – Centrale del Latte della Toscana, which will be wholly owned by Centrale del Latte d’Italia. The move will “guarantee equity consolidation” and safeguard the production facility and current levels of employment at Mukki, “which is an important institutional presence locally”, Centrale del Latte d’Italia said.

Privately-owned Centrale Del Latte Di Torino said the merger was part of both companies’ “wider growth strategy for external lines… aimed at creating an inter-regional hub facility specialising in the production and sale of milk and dairy products” The “hub” will be Italy’s third regional centre for milk and dairy production centre, “with a leadership position in the Piemonte, Toscana, Liguria and Veneto regions”.

The city of Florence is Mukki’s largest single shareholder (43%). The city of Pistoia holds just over 18% in the firm.

In 2014, Centrale Del Latte Di Torino announced the delivery of its first shipments of UHT milk and soya drinks to China, towards what it said would be estimated total exports of around two million litres of product to the Chinese market.