Dairy Crest expands with Starcross acquisition

Announces increased volumes of milk supply to Wm Morrison Supermarkets and acquisition of Starcross Foods.

06/05/05 Dairy Crest has announced that it has been successful in the review by Wm Morrison Supermarkets of its fresh milk supply arrangements. The company has been informed that its share of the supermarket group’s fresh milk supply will increase from approximately 30% to approximately 50%. The new business is expected to take effect from 3 October 2005.

Separately Dairy Crest is announcing the acquisition of Starcross Foods Limited (“Starcross”) for a consideration of £16.9 million (including debt on acquisition of £9.1 million). The consideration will be financed out of existing bank facilities. Starcross is a modern dairy in Foston, Derbyshire opened in May 2002 with current processing capacity of up to 100 million litres of milk per annum.

The acquisition of Starcross reinforces Dairy Crest’s commitment to the retail milk business and our customers. Starcross is an advanced modern facility, which will significantly extend the company’s geographical footprint across England and Wales to cover most of the major northern conurbations.