Robert Wiseman Dairies has confirmed that it is to acquire the fresh liquid milk business of Milk Link Limited, comprising Peninsula Milk Processors Limited and Newlands Farm (Milk Link) Limited.

The total cost of the acquisition is expected to be GBP5.5m, to be settled in cash subject to an assessment of the volume of milk transferring and net assets at completion.

The acquisition is dependent upon obtaining confirmation that the Office of Fair Trading does not intend to refer the transaction to the Competition Commission.

Milk Link currently sells around 32m litres per annum, mainly to symbol group retailers and neighbourhood shops, from dairies in Okehampton, Devon and Pensilva, Cornwall.

As part of the transaction, Wiseman will enter into a supply contract with Milk Link for a certain proportion of its raw milk requirements in the South West of England. This will ensure that milk requirements for Wiseman's South West operation are met by dairy producers from the area.

Wiseman currently supplies around 1.4bn litres of milk and has 24% of the market in the UK.

"The company views this as a strategic acquisition that will benefit the business and strengthen relationships with its customers," a statement said.

Robert Wiseman, chief executive of Robert Wiseman Dairies, said: "The integration of Milk Link's fresh liquid milk businesses will help us to provide extensive coverage through the South West of England.

"This acquisition complements our plans to open a new GBP46m dairy in Bridgwater, Somerset in autumn 2007, and will allow us to quickly grow our presence in this part of the country. We very much look forward to serving Milk Link's existing customers and growing the business."