Dairy Crest, which is making 180 people redundant at the former Unigate Dairy in Kidlington, has bought up a major competitor.

The company will add Utterly Butterly and Vitalite to its range of butters and yoghurts, under an £86.5m deal for St Ivel Spreads.

The chilled dairy foods group said the Kidlington plant would close in November, but the juice packaging factory in Langford Lane would continue.

Dairy Crest is buying the St Ivel business from Uniq. It bought Unigate in July 2000.

Chief executive Drummond Hall said the deal would help to continue to deliver attractive growth.

But shares in the group, based in Surrey, fell nine per cent as it added that first-half profits may come in below last year's.