Significant efficiencies and synergy benefits amounting to around £25 million sterling are expected to be achieved by the Dairy Crest group through its £250 million purchase of the liquid milk and cheese business of Unigate.

Key assets changing hands in the deal include an 80 per cent stake in Wexford Creamery, along with full ownership the Fermanagh Creameries.

The acquisition will establish Dairy Crest as the UK's leading dairy company when it is completed shortly.

In particular, it will increase cheese volumes by 50 per cent through the addition of some 25,000 tonnes of cheddar produced in the UK and 15,000 tonnes produced in Ireland.

Dairy Crest directors believe the substantial increase in cheese volumes will help the group to address the trading pressures in the commodity sectors of the dairy industry.

Overall, synergy benefits from the merger are expected to be "not less than £25 million" in the 2002-03 financial period, said Dairy Crest chief executive Mr John Houliston in comment on the group's financial results.

Annual pre-tax profit slipped £1.0 million to £44 million in the 12 months to March 31st on turnover up £20 million at £794 million.

The group's consumer foods division increased operating profit by 4.0 per cent to £32.6 million on turnover up 3.0 per cent at £494 million.