Muller's acquisition of Lancashire-based Yew Tree Dairy has been approved by the Competition and Markets Authority (CMA).
The acquisition, first announced in June and due to be completed next week, will see Muller use Yew Tree's milk powder production capabilities to grow exports.
In a statement following the CMA's decision, Muller said that the move would 'secure a positive future for the British dairy industry'.
Yew Tree Dairy, a family-owned dairy company, mainly sells milk powders, and bulk cream and raw liquid milk in the UK and Europe.
In August, the CMA launched of a merger inquiry to determine if the deal would result in a substantial lessening of competition within the market in the UK for goods or services.
The competition watchdog announced on its website today that the case was closed, with the full text behind its decision to green light the move due to be published shortly.
Dairy processor Muller said that it intended to utilise internal expertise from within the wider company to enhance its milk drying capability.
This would enable it to become a major producer and exporter of powdered milk products made in Britain, with milk from British dairy farms, it said.
Rob Hutchison, chief executive at Muller Milk & Ingredients, said this acquisition would drive significant progress towards the processor's purpose to 'deliver a better dairy future'.
He said: "Not only does this acquisition underline our ambition to grow our business, but also a commitment to ensuring our customers, farmers and consumers will all feel the benefit.
“We’re excited to welcome our new colleagues from Yew Tree Dairy to Müller, and I look forward to meeting them all in the coming weeks and opening a new chapter for both businesses and the wider supply chain."
Carl Woodcock from Yew Tree Dairy said that as a family-owned company, it was proud of the organisation it had built over the last few decades.
“It was important for us to hand over the reins to people who’d look after the business with the same care and consideration as we have over the years.
“Joining Muller will help Yew Tree Dairy go from strength to strength, benefitting our staff, farmers and customers and creating a strong and successful future for British dairy."
