Dairy Crest’s decision to withdraw from UK dairies comes at a time when its chief executive, Mark Allen, is aiming to push into the lucrative global baby milk formula market.

Dairy Crest’s dairies business contributed over £143m in losses over the past four years and Mr Allen has said that the plunging milk prices has meant that milk production would be better off in the hands of privately owned companies, rather than a listed company.

Dairy Crest was originally created by the Milk Marketing Board in the 1950s

Shares in Dairy Crest rose by 13p, or 1.9pc, to 693p on the back of the company confirming the deal had finally closed.

“This is a transformational moment for Dairy Crest and the wider dairy industry and helps bring much needed stability to the UK dairy sector”, Mr Allen said.

“Dairy Crest can now focus on growth, through both our branded cheese and spreads operations and new revenue streams from manufacturing products for the fast-growing global infant formula market.”

Dairy Crest, which was originally created by the Milk Marketing Board in the 1950s, is planning to use the leftover whey generated while making its Cathedral City cheese and Countrylife butter, into demineralised whey powder, otherwise known as galacto-oligosaccharide (GOS). GOS is then used to make infant formula, but it is also being explored as a type of feed for animals.

The global infant formula market is considered particularly lucrative in China as parents in the country are increasingly opting for Western brands due to baby milk contamination scandals in recent years. Dairy Crest’s ambitions in China have already been boosted by the country’s recent decision to axe its single child policy.