The boards of LacPatrick Dairies and Lakeland Dairies have agreed to enter into exclusive discussions regarding an amalgamation of the two groups.
In a statement made on its website, the the border region dairy group said that any agreement reached will be subject to shareholder approval and the relevant regulatory clearance.
LacPatrick has been the feature of plenty of speculation since it announced on 17 April that it would be interested in pursuing "a number of strategic options".
Since then, many large dairy coops from the north and south or Ireland have been linked with a potential deal.
Initially, Belfast-based Dale Farm were reported to be interested in a deal with the group, but chief executive Nick Whelan denied having any contact with the group.
Within a week Lakeland Dairies were understood to be the likeliest partner, with Aurivo and Glanbia understood to be keeping an eye on the situation.
In mid-May, LacPatrick sent out the details of the business to potential bidders.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.