Germany's Muller has increased its grip on the UK dairy market with an £80m deal to buy some of the operations of Cathedral City maker Dairy Crest.
The yoghurt maker, which operates as Muller Wiseman Dairies in the UK following its acquisition of Robert Wiseman in 2012, is set to acquire four dairy sites and 72 depots, as well as the flavoured milk brand Frijj.
The move, which is subject to competition clearance, will allow Dairy Crest to focus on its cheese and spread operations, which include leading supermarket brands Clover and Country Life.
Muller UK employs 6,000 people across four businesses, with Muller Wiseman operating six dairies from Bridgwater in Somerset to Aberdeen as well as a fresh milk distribution network in the UK. The company buys milk from more than 1,200 British dairy farmers.
Dairy Crest's dairies operations process and deliver around 1.3 billion litres of milk a year to major retailers, plus smaller retailers, coffee shops, hospitals, and residential customers.
The sale was announced as Surrey-based Dairy Crest reported a 95% slide in half-year profits to £900,000, dragged down by volatile milk prices and the cost of plant closures. Revenues rose 1% to £682.1m.
The sale includes factories in Foston, Chadwell Heath and Severnside as well as the Hanworth glass bottling site, where Dairy Crest is already consulting with employees about the site's future.
Dairy Crest chief executive Mark Allen said: "Completing this transaction would be a positive development for Dairy Crest and for the UK dairy industry.
"The combination of our dairies operations with those of Muller Wiseman Dairies will create efficiencies and economies of scale that will help to create a more sustainable UK dairy sector that is better placed to compete on the global stage."