The Competition Authority has approved Dairygold's sale of the CMP dairy business in Cork to Glanbia.

Announced last month, the €10 million sale means that Dairygold will be exiting the liquid milk industry, although its 130 milk suppliers will continue to deliver to the co-operative, which will pass the 6.15 million gallon pool on to Glanbia.

The companies also announced a contract manufacturing arrangement for elements of their respective milk processing activities last month.

This agreement means that Dairygold will supply cream to Glanbia for the manufacture of Dairygold butter and butter oil at Glanbia's Ballyragget butter production plant. Glanbia will also purchase whey from Dairygold for processing.

Glanbia will then give Dairygold milk for manufacturing into Glanbia dairy products at Dairygold's Mitchelstown plants from 2006.

Dairygold has undergone substantial restructuring in the past 12 months, following a warning last year from Jerry Henchy, Dairygold's chief executive, that the co-op could lose up to €26 million over the next few years.

So far, the restructuring has resulted in 920 job losses and the CMP sale has resulted in the loss of about 100 jobs at Dairygold's plants at Cork and Mallow.

The sale was not judged to have substantially lessened competition under the Competition Act 2002.