Shares in the company, which makes Cathedral City cheese and Country Life butter, rose 13 percent in morning trade.

The dairies business has been a drag on results of the company, which posted a 95 percent slump in first-half profit. The Surrey-based company has been focussing on improving profit by cutting distribution costs, brand improvement and selling surplus properties.

"The deal will reduce net debt and unshackle the high-quality foods business from a resource drain, sharpening focus, which could warrant a modest re-rating," analyst at Jefferies said in a note.

The deal includes Dairy Crest factories at Foston, Chadwell Heath and Severnside. It also includes the Hanworth glass bottling site, where Dairy Crest is consulting with employees on the site's future, and 72 depots.

The sale, which is expected to take several months, will protect long-term employment and help reduce costs and increase efficiency, Dairy Crest said.

The dairies business recorded a loss of 4.4 million pounds in the first half of this year compared with a profit of 2.6 million pounds a year earlier.

Shares in the company were up 12 percent at 478 pence in morning trade on the London Stock Exchange.

(Reporting by Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier)