Arla, Milk Link merger to go ahead28 September 2012
Arla Foods amba and Milk Link have confirmed that regulatory approval has been granted by the European Commission to merge. The Commission’s approval means that the merger will now complete on 1 October.
The resulting company will be the UK's largest dairy company, Arla said.
The approval of the merger has been given subject to Arla implementing a remedy to address the Commission’s concerns relating to a perceived reduction of competition in the UK long life milk market.
As such, in order to restore effective competition, Arla has committed to divest Milk Link’s milk drinks business at Crediton on a viable and separate, standalone basis. This business includes Crediton dairy, which produces all of Milk Link's long life milk, long life cream, extended shelf life milk and flavoured dairy drinks and fresh bulk cream.
The milk drinks business will be sold to a purchaser on terms approved by the Commission. As such, from now the existing milk drinks business will be ring fenced from the rest of the merged business and as part of its commitment to the Commission, Arla has undertaken to preserve the economic viability, marketability and competitiveness of the business. This includes making resources available for the development of the business, in line with existing business plans, and the retention of a dedicated senior level management team to lead the business.
Arla Foods UK’s long life milk business, based at its Settle creamery, will not be affected by the remedy and will retain an established market position in long life and flavoured milk.
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