Germany’s Theo Muller group has acquired Dairy Crest’s dairy business for £80 million in cash, marking the second major UK acquisition for the group in two years, having purchased Robert Wiseman Dairies for £280 million in 2012. The latest deal will give control of the top two UK dairy companies to Theo Muller, and with the acquisition of Dairy Crest’s capacity to produce and deliver 1.3 billion liters of milk per year, will give the group a 30% share of the UK fresh milk market. The deal is subject to regulatory approval, which just a matter of years ago would have been unlikely. However, consolidation within the industry has become necessary in the face of falling milk prices and increasing cost of inputs making the market unsustainable for processors. For Dairy Crest, the sale of its dairy business will allow the company to focus on its higher-value, branded cheese and spread products, and its whey investment established through a deal with Fonterra.
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