The UK dairy groups, Dairy Crest and Unigate, have decided to pool their respective dairy businesses in a joint company. If approved by the two groups' shareholders, the merger will take effect from the end of May, the companies announced in a press statement on Friday, February 18.
The structure of the proposed merger means that the shareholders of both companies will become shareholders in the new Dairy Crest, while Unigate's existing owners will also become shareholders in a new Unigate company which will focus on the production and sales of convenience food. The merger is expected to lead to annual synergies of not less than GBP 25 million in the financial year ending 31 March 2003.
Following the merger, Dairy Crest will receive 3 billion kg milk annually. The new company will be the UK's largest producer of cheese and the second largest producer of liquid milk.