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November 06, 2014 01:00 AM

Dairy Crest sells dairies, packaging to Müller UK

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    Dairy Crest plc
    Müller UK will take over three dairy processing and packaging sites from Dairy Crest plc.

    Dairy Crest plc has announced it has agreed to sell its dairies operation to Müller UK and Ireland for 80 million pounds ($127.1 million) in cash.

    Dairy Crest, which recently announced it would shut down its remaining glass milk bottle production in favor of plastic, said the sale process would be conditional on approval from the competition authorities and was expected to take “several months” to complete.

    Once finalized, Esher, England-based Dairy Crest said it would focus on its cheese and spreads operations.

    The group said proceeds from the sale would initially be used to pay down its net debt, which in March this year stood at 142 million pounds ($225.8 million).

    Assets covered by the disposal include Dairy Crest's factories at Foston in Derbyshire, Chadwell Heath in Essex and Severnside near Bristol, which process and bottle liquid dairy products.

    Müller UK is based in Shropshire, England.

    Mark Allen, Dairy Crest's chief executive, said: “Dairy Crest is very proud of the dairy business it has built and we are delighted that it will be combined with Müller Wiseman Dairies' equally well-established operation. 

    “This proposed sale is a great opportunity for our two companies, our farmers, our staff, our customers and consumers. 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 Müller 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.”

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