Competition regulator to review Dairy Crest's dairies disposal to Müller

Dairy Crest's proposed sale of its dairies operations to Müller has been referred to the Competition and Markets Authority (CMA), though the branded milk, cheese and spreads maker has said the deal still "remains on track".

The sale, first announced in November 2014, will see Dairy Crest offload its fresh milk, flavoured milk, cream, butter and milk powders assets to the UK and Ireland division of the German food giant.

The milk business in particular currently processes and delivers 1.3bn litres of British milk ever year.

However, since floating in 1996, Dairy Crest has actively reduced its exposure to the unbranded commodity markets by scaling back its diary ingredients business, including the disposal of its commodity cheese operations in 2006.

Following constructive talks with the European Commission, the sale has now been referred back to the UK for review by the CMA, Diary Crest said.

However, the group added: "The transaction remains on track and, as previously announced, has received the approval of Dairy Crest shareholders."

Chief executive Mark Allen welcomed the development, saying it has always been the company's preference for the transaction to be reviewed in the UK.

"We will work with Müller and the CMA to progress the merger review as quickly as possible," he said.