July 10 (Reuters) - Australia's competition watchdog

said on Thursday that it would not oppose Lactalis' proposed

acquisition of New Zealand-based Fonterra Co-Operative Group's

consumer, dairy ingredients and food service

businesses.

The Australian Competition and Consumer Commission's (ACCC)

Deputy Chair Mick Keogh said it was unlikely that the

acquisition would result in a "substantial lessening of

competition."

"Because Fonterra and Lactalis have differing end-product

mixes, they often seek to acquire milk from farmers with

different production profiles. Accordingly, we found that they

are not likely to be each other's closest competitors," Keogh

said.

France-based Lactalis owns a range of brands including

Pauls, Président and Lactalis Foodservice in Australia, while

Fonterra owns consumer brands such as Western Star, Mainland,

and Perfect Italiano.

Lactalis and Fonterra are also the largest buyers of raw

milk in Victoria, with substantial presence in Tasmania.

The ACCC's informal review of the French dairy group's

unannounced bid for Fonterra assets in early May came after

Reuters reported that companies including Japan's Meiji ( MEJHF ),

Lactalis and Canada's Saputo ( SAPIF ) were considering bids for Fonterra

units up for divestment.

Following the Reuters report, Lactalis said it had not

signed any agreement regarding the potential acquisition of

parts of Fonterra.

Lactalis and Fonterra did not immediately respond to

Reuters' requests for comment.

Meanwhile, Australia's Bega Cheese said in June it

plans to seek an informal regulatory approval for the

acquisition of Fonterra's Oceania business.

However Fonterra, which produces certain Bega Cheese

products under licence, said in an emailed statement to Reuters

that it intends to divest its global consumer and integrated

businesses, including Oceania and Sri Lanka, as a whole.

The divestment plan, potentially valued at around NZ$4

billion ($2.40 billion), was first announced in November last

year by the company.

Bega Cheese did not immediately respond to a Reuters request

for comment.

($1 = 1.6647 New Zealand dollars)