Arla Foods has offloaded UK milk drinks operation Crediton Dairy to a group of executives who worked for the unit’s previous owner, Milk Link.

Neil Kennedy, former chief executive of Milk Link and Tim Smiddy, the UK co-op’s ex-finance director has led an MBO of Crediton.

The deal, struck for an undisclosed sum, was required as part of EU approval of Arla’s merger with Milk Link last year. Arla will continue to supply the dairy with milk.

Smiddy, who will become Crediton Dairy’s MD, said the business had “strong growth potential”, pointing to its “growing customer base” and “established” products.

Crediton Dairy produces Moo long-life milk, functional milk sold under the Flora Pro Activ brand and chocolate milkk under licence for Mars Inc.