AFR reports that National Foods is also prepared to sell factories and depots in order to be given the green light from the competition watchdog.

National Foods proposed the undertakings after feedback that the ACCC was concerned about the level of competition in dairy markets in NSW and South Australia if the company successfully acquires Dairy Farmers.

"Dairy Farmers want unconditional bids and this should allow us to put an unconditional bid on the table should we choose to bid," a National Foods spokesperson told the paper.

Meanwhile, AFR is also reporting that Singaporean commodity company Olam has emerged as a strategic player in the New Zealand dairy industry after acquiring a 24.9pc stake in Dairy Trust, an emerging processing company.