THE Co-operative Group has announced the sale, for £ 75 million, of Associated Co-operative Creameries (ACC) to Dairy Farmers of Britain (DFB).
DFB markets two billion litres of milk per year from 3,250 member farms. The acquisition of the £ 400 million turnover ACC makes DFB the largest vertically integrated dairy co-operative in the UK.
ACC currently processes and manufactures one billion litres of liquid milk, 20,000 tonnes of cheese and 14,000 tonnes of value added milk products from seven sites across the UK.
Said Malcolm Smith, chief executive of DFB: "This is an exciting day for everyone at DFB and ACC. The acquisition marks a huge step towards fulfilling our ambitious growth plans, and that means great news for our customers, employees and farmers. We welcome ACC staff to DFB and look forward to working together with our new colleagues to build our new business."
The Co-operative Group announced in April this year that following a strategic review it was exploring options for the sale of ACC, which it said would be in the best interests of the business and its employees.
Commenting on the sale, Martin Beaumont, Chief Executive of the Co-operative Group said: "The dairy industry has gone through significant change in recent years and consolidation has resulted in fewer and bigger players.
"The sale of ACC to DFB is a marriage of two successful co-operative enterprises which creates a major new force in this competitive market sector and can only be good for members, employees, customers and consumers alike."
"The proceeds of the sale will be reinvested in support of the Group's strategic plans for its trading businesses. In particular, we cannot afford to ease off on the pace of acquisitions in food retailing, nor indeed in pharmacy and travel where we are delivering first class services to our members and customers," he added.
All ACC staff will transfer employment to DFB on existing terms and conditions.
The Co-operative Group was advised by HSBC Bank plc and Hammonds.