Dairy Farmers' Ian Langdon said the National Foods proposal offers shareholders an "attractive cash price as well as providing certainty regarding forward farm-gate milk pricing and security of milk supply arrangements".

"In addition, the proposal delivers on the Board's commitment to provide shareholders a liquidity event following the cooperative’s 2004 restructuring," Mr Langdon said.

To be successful, the National Foods proposal is subject to a number of conditions precedent including the support of more than 75pc percent of active members who vote.

"The proposal is also subject to DFMC entering into revised supply contracts with new or existing suppliers until at least June 30, 2010," Mr Langdon said.

"This will be for minimum specified volumes by region which will maintain overall milk volumes based on current milk supply levels.

"This in turn, provides certainty of milk off-take for farmers.

"This competitive farm-gate milk pricing will apply from the first day after the end of the milk supply month in which completion of the acquisition occurs until June 30, 2010.

"After this period, National Foods has indicated that it intends to continue to pay DFMC suppliers farm-gate milk prices that are competitive in the relevant region."

National Foods managing director, Ashley Waugh, said the acquisition would result in "the most respected portfolio of dairy brands in Australia".

"National Foods has the capability and financial strength to leverage the acquisition ... to create new business opportunities domestically and in the vitally important Asian region – providing suppliers with secure and growing demand for their milk," Mr Waugh said.

"If the proposal is approved by shareholders, a strategy will be implemented to ensure a seamless transition to the new ownership arrangements for both businesses’ stakeholders, including farmer suppliers, customers, employees and franchise owners."