Lakeland Dairies will acquire a 40 million gallon Nestlé milk processing plant in Omagh, Co Tyrone, for an undisclosed sum.

The deal is Lakeland's second major acquisition in the Border region in as many months, and is certain to consolidate the Cavan-based dairy co-operative's position as the fourth-largest dairy processor in the country.

In February, Lakeland bought a Kerry Group operation in Baileboro, Co Cavan, for €33 million. As a result of these two deals, Lakeland's milk pool will grow to 160 million gallons, 100 million in the Republic and the balance in the North. This compares to Kerry's 170 million gallon milk pool.

The Omagh acquisition was initiated by Lakeland, which approached Nestlé with a proposal enabling the Swiss multinational to carry on drawing milk powder from the Omagh plant for use at other Nestlé facilities.

The company has operated a plant in Omagh since the 1940s.

Nestlé announced last month that it was embarking on a major restructuring of its British and Irish operations which would result in the sale of a factory in Tallaght, Dublin, and a concentration on a small number of core brands.

The Omagh disposal is not thought to form a central part of that restructuring.

Lakeland will continue to employ the Omagh plant's 62 staff and will retain milk supply relationships with 205 farmers in the region.

A Lakeland spokesman said that this supplier base would expand as the company moved the plant from a current 16 million-gallon production level to full capacity. When the Omagh facility is integrated with Lakeland's existing operations, the company will have a presence in 15 counties, a projected annual turnover of €380 million and profits of €48 million.

The business will employ 450 people.