Danish dairy firm Arla Foods amba said on Friday it had been cleared by the European Commission to proceed with its takeover of British co-operative Milk Link Ltd as long as it satisfies a condition related to competition in the UK long life milk market.
Arla will have to offload Milk Link’s milk drinks business at the Crediton dairy, whose product pipeline includes long life milk, long life cream, extended shelf life milk and flavoured dairy drinks and fresh bulk cream. Those operations, which the Danish company has pledged to keep sound until their disposal to a buyer in a deal approved by the EC, will be ring fenced from the remainder of the merged business, the company said.
The condition has no impact on Arla’s British long life milk operations, based at its Settle creamery.
Arla unveiled its plan to buy Milk Link, as well as German co-operative Milch-Union Hocheifel, on 22 May in a drive to cement its European dairy presence. It said then that the amalgamated operations would have an aggregate 12,300 co-operative owners in Denmark, Sweden, Germany, Belgium, Luxembourg and the UK, versus a total of 8,024 only in Denmark, Sweden and Germany at the time.
Arla’s board of representatives gave the green light to the deals on 26 June. The merger in the UK creates the biggest dairy specialist in the country. Completion is scheduled for 1 October.
Wholesale reform of Libor is needed in order to restore the credibility of the international benchmark, FSA managing director Martin Wheatley said today.
Releasing his report on the future of the London inter-bank offered rate, Wheatley dismissed the possibility of entirely replacing the benchmark and instead set out a ten-point plan for reform.
This includes the introduction of a new regulatory structure for Libor and allowing the FSA to take action against those who break the rules. Wheatley also called for a fundamental overhaul of the way Libor is run, including taking responsibility away from the British Bankers’ Association (BBA), the banking organisation that currently oversees the rate.
In his speech today, Wheatley criticised the BBA for being careless in policing Libor and for putting too much trust in a system that lacked “the right level of checks and balances”.
The BBA acknowledged yesterday that the review was an “essential step” in reforming the system and indicated that it would support any recommendation that responsibility for Libor should be passed to a new administrator.
Other recommendations of the Wheatley Review include improving some of the data on which the inter-bank rate is based, requiring banks to back up their submissions with evidence of relevant transactions, and also encouraging more institutions to submit rates to Libor in order to make it more representative and harder to manipulate.
Wheatley described Libor as a broken system but stressed that it is not beyond repair. He said that reform is essential to help restore the trust that has been lost, and it is up to regulators and market participants to work together towards a lasting and sustainable solution.
The independent review on the regulation of Libor was set up by the UK government in July, after Barclays was fined GBP290m by UK and US regulators because its traders had attempted to manipulate the key global interest rate.