The UK’s competition watchdog has given the green light to the merger of dairy processors First Milk and Milk Link.
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The Office of Fair Trading handed down its approval to the deal yesterday afternoon (12 December), paving the way for the creation of a GBP1bn (US$2bn) milk giant.
First Milk and Milk Link, both farmer-owned co-operatives, announced their plans to merge in October.
The two co-operatives, owned by a total of 4,250 farmers in the UK, want to join forces to increase their pricing power, a factor growing in importance as dairy commodity prices soar around the world.
Milk Link said it was “pleased” with the OFT’s decision and said both companies are continuing to work towards the merger. “We continue to make progress with regards to the due diligence work necessary to enable both boards to endorse the merger to their members,” the company said.
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By GlobalDataMilk Link has a 50% stake in Staplemead Dairy Products, a joint venture with Arla Foods, manufacturing retail cream, flavoured milks, and custards.
First Milk has a 15% stake in Robert Wiseman Dairies and a 50% stake in Promo-Vita, a pre-biotic joint venture with Fayrefield Foods International.
