Danish-Swedish multinational Arla Foods and Germany’s DMK Group announced a planned merger on Tuesday that will create “the largest dairy cooperative in Europe” of more than 12,000 milk producers if approved.
The merger under the name Arla would benefit consumers through high-quality production and an improved range, they said.
“The merger between Arla Foods and DMK Group represents a union of shared values and complementary strengths, creating the largest dairy cooperative in Europe,” an Arla company statement said.
General meetings of the two cooperatives in June are to vote on the merger. Approval will be needed from the competition authorities, with the companies hoping this will take place by the end of the year.
The new Arla is to be based in Viby in Denmark, where Arla is currently based. DMK is based in Zeven in Germany with its administration in Bremen.
The combined cooperative will turn over almost €19 billion ($21 billion) per year and have a staff complement of around 28,700. According to Rabobank of the Netherlands, Arla is the seventh-largest dairy business in the world, and DMK the 18th.
The BDM German dairy farmers’ association urged the authorities to check the planned merger carefully.
“What is being sold here as a unification of common values and strengths is in truth a concentration of power that will further restrict competition for raw milk and increase dairy farmers’ dependence on a few large concerns,” BDM head Karsten Hansen said.
A DMK spokeswoman said there would be no changes in the immediate future. “Everything will continue to run in the usual way as to date,” she said.
