Dairy company Robert Wiseman Dairies  has announced that it has agreed terms for the acquisition of the trade and certain assets of the fresh liquid milk business of Scottish Milk Dairies Limited, a wholly owned subsidiary of First Milk Limited.

The total cost of the acquisition will be circa £0.9m (US$1.6m) and is subject to an assessment of the volume of milk transferring. The consideration will be satisfied in cash. It is expected that the acquisition will complete in early September.

SMD currently supply around 10m litres per annum, approximately 2% of the fresh liquid milk in Scotland, from their dairy and depot in Hamilton, near Glasgow. In the last financial year, which ended 31 March 2005, the turnover of the fresh liquid milk business of SMD amounted to £4.6m.

Wiseman currently supplies around 1.3bn litres and has 22% of the market in Great Britain and views this as a strategic acquisition that will benefit the business along with existing and future customers.

"Wiseman has invested over £60mn in its dairies, depots and fleet in Central Scotland," said John Duncan, chief executive of First Milk. "This investment is reflected in their quality, customer service and product range. I am sure that our customers will benefit from the level of expertise and range of products that Wiseman currently supplies to their customers."

'This acquisition will complement our existing operations and enhance efficiencies in Central Scotland," said Robert Wiseman, chief executive of Wiseman. "Customer service and quality of product remain our top priorities and I can assure all customers of SMD that we are keen to serve them in the same way that we serve all Wiseman customers."