Müller is to acquire Dairy Crest’s UK fresh milk business along with the bulk butter and milk powder business in a deal worth £80m (€102m).
Dairy Crest will focus on its cheese, packet butter and spreads businesses and retain ownership of its cheese production and storage. Cheese and butter recorded revenues of £442m and profits of £56.1m last year.
Dairy Crest’s dairies operations process and deliver around 1.3bn litres of British milk per annum and last year recorded revenue of £944.8m and profits of £0.6m.
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The deal includes three factories and a glass bottling site. The two companies will also enter into a supply agreement whereby Müller Wiseman Dairies will sell bulk butter to Dairy Crest for five years. In addition, Dairy Crest will provide certain transitional services.
Dairy Crest will continue to buy milk from around 400 supplying farmers to produce cheese and whey. It will also continue to produce and market infant formula ingredients with Fonterra.
Since flotation in 1996, Dairy Crest has significantly reduced its exposure to unbranded commodity markets by scaling back its dairy ingredients business and (in 2006) disposing of its commodity cheese operations.
Proceeds from the sales will be used to reduce Dairy Crest net debt, which stood at £209.6m on 30 September.
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Müller is to acquire Dairy Crest’s UK fresh milk business along with the bulk butter and milk powder business in a deal worth £80m (€102m).
Dairy Crest will focus on its cheese, packet butter and spreads businesses and retain ownership of its cheese production and storage. Cheese and butter recorded revenues of £442m and profits of £56.1m last year.
Dairy Crest’s dairies operations process and deliver around 1.3bn litres of British milk per annum and last year recorded revenue of £944.8m and profits of £0.6m.
The deal includes three factories and a glass bottling site. The two companies will also enter into a supply agreement whereby Müller Wiseman Dairies will sell bulk butter to Dairy Crest for five years. In addition, Dairy Crest will provide certain transitional services.
Dairy Crest will continue to buy milk from around 400 supplying farmers to produce cheese and whey. It will also continue to produce and market infant formula ingredients with Fonterra.
Since flotation in 1996, Dairy Crest has significantly reduced its exposure to unbranded commodity markets by scaling back its dairy ingredients business and (in 2006) disposing of its commodity cheese operations.
Proceeds from the sales will be used to reduce Dairy Crest net debt, which stood at £209.6m on 30 September.
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