A provisional green light from the UK’s competition watchdog for Müller’s proposed purchase of Dairy Crest’s liquid milk division could trigger a new wave of consolidation in the spreads and cheese category.
Private equity and trade players could use the branded (cheese and spreads) business of Dairy Crest as a “proper springboard” in an approach for Unilever’s new baking, cooking and spreads unit, as well as non-core assets from other big international groups such as Mondelez, according to senior City sources.
The CMA said this week it was minded to accept concessions by Müller to remedy antitrust concerns over the acquisition, with processors Medina and Freshways emerging as frontrunners to take a piece of the deal.
Clive Black of Shore Capital said this put the branded business, including Cathedral City, Clover and Country Life, “in play… without the burden of the dairies businesss”.
One City source said potential buyers could use Dairy Crest as a platform to enter talks with Unilever about acquiring its under-performing spreads business,
“There are two or three groups of assets around which could be of interest to a number of players for creating a broader pan-European platform in what is a strongly branded place,” the source added.
In February, The Grocer reported interest in the Dairy Crest branded business from Lactalis and Kerry Group. A City source said this play was “still valid”.
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