Multinational cooperative Arla Foods is to merge with Germany’s DMK Group, creating what the Swedish-Danish group described as the ‘strongest dairy cooperative’ in Europe.
The merger will bring together more than 12,000 farmers and the joint cooperative aims to achieve a combined pro forma revenue of €19 billion.
Peder Tuborgh, CEO of Arla Foods, stated, “DMK Group is the largest dairy cooperative in Germany and a very attractive partner that shares our core values. Our strong market positions and product portfolios complement each other very well and our strong partnership in recent years has proven that DMK Group is an ideal partner for Arla. […]
“This merger is a natural continuation of our strong collaboration to the benefit of consumers, our farmers and their milk price.”
Merger
The merged entity will be named Arla with its headquarters in Viby J, Denmark, and Jan Toft Nørgaard as its chair.
Peder Tuborgh will serve as its chief executive, and Ingo Müller will step into the Arla executive management team as executive vice president of post-merger integration.
Nørgaard commented, “The foundation of this partnership is formed by our shared values, and I am immensely proud of this proposed merger, which is a win-win for our cooperatives.
“The strength of both Arla and DMK Group lies in our shared commitment to quality and innovation, and I see DMK Group as the perfect partner in shaping a new and strengthened Arla, poised to lead in the dairy industry.”
Müller added, “Arla has established itself as a key player in the dairy industry, and by partnering up we will have a strong and attractive branded and private label product portfolio for all our customers.
“Through Arla’s global reach we can access consumers and customers beyond our current geographical reach as well as strengthening our business resilience. Our complementary strengths, both in business and mindset, will enable us to keep advancing in dairy technology and innovation, while also providing a strong home for farmers.”
Market Consolidation
As a combined entity, the cooperative will consolidate its commercial position and have a more diversified product portfolio and market position despite the anticipated decline in the overall European milk pool.
The merger will help create the future of dairy by enhancing nutritious, high-quality dairy production and innovation in Europe and the world while securing a strong milk price for farmer owners, Arla added.
The merger is subject to approval from the board of representatives in the cooperatives as well as regulatory bodies.
Heinz Korte, chair of DMK Group, added, “This partnership strengthens the resilience of our cooperatives and significantly contributes to strengthening the competitiveness of our farmers.
“Together, we can expand our reach for our dairy products, thus improving our offering and jointly driving the further development of innovative products for the benefit of our members.”
