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Last Updated: Tuesday, 5 February 2008, 13:49 GMT
Dairy giants abandon merger plans
Dairy cow
The dairy firms will continue to develop their businesses
Two of the UK's largest dairy firms have announced that they have abandoned plans for a merger.

Glasgow-based First Milk and Bristol's Milk Link - with sites in Kirkcudbright and Lockerbie - are both co-operatives owned by thousands of farmers.

The companies have been unable to resolve a number of issues, including a valuation of the two businesses.

The National Farmers Union Scotland said that a "huge opportunity" for the industry had been missed.

Milk Link and First Milk announced their merger intention in October.

It is difficult to view today's news as anything other than a huge let down
Jim McLaren
NFUS President

However, a joint statement confirmed it would now not be taking place after a period of due diligence and business planning activity.

"At the end of this process there were a number of important issues that we were unable to resolve including the valuation of the two businesses," confirmed a statement on the companies' websites.

"Despite extensive discussions, it has not been possible to agree terms for a merger that either party felt they could recommend to their memberships at the present time."

It said both firms would now "continue with their plans to grow and develop their respective businesses".

The news has been met with disappointment by the NFUS.

'Best opportunity'

"I am not interested in hearing who is to blame for the talks collapsing, the fact is that a real chance to create a united rather than fragmented dairy sector has been blown, certainly in the immediate short-term," said president Jim McLaren.

He said it had been a chance for the industry to create a "solid platform for the future".

"Members of both co-operatives will be demanding explanations as to why the best opportunity in a long time has been allowed to slip from our grasp," he said.

"It is difficult to view today's news as anything other than a huge let-down."

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