Dairy cooperatives Arla Foods and DMK announce merger
The Danish dairy cooperative Arla Foods and the German DMK Group are planning to merge, the companies announced. Together they process the milk of 12,000 farmers and have an annual turnover of €19 billion. If the merger goes ahead, they will become the largest dairy cooperative in Europe, larger than the combination of FrieslandCampina and Milcobel.
The merge will see a milk pool of 19 billion kgs of milk per year. Arla Foods has a turnover of €13.8 billion and is owned by 7,600 member suppliers. The company processes 13.7 billion kgs of milk per year.
DMK Group has a turnover of €5.1 billion and has 4,600 member suppliers. DMK processes 5.3 billion kgs of milk per year. Both parties have signed a letter of intent; however, members and competition authorities must first give their approval.
DOC to hold members’ meeting
DOC has informed its members by email. In that email, Guus Mensink, chairman of the board of DOC Kaas, writes: “We are proud of the proposed merger with Arla, a cooperative that, like us, strives for added value and innovation. This merger strengthens the resilience of our cooperatives and plays an important role in further strengthening the competitiveness of our members. With this proposed step, we can expand our range of dairy products and stimulate product innovations, all for the benefit of our members.”
The cooperative will hold a digital members meeting on today (Wednesday 9 April) and regional meetings as of Thursday.
Arla Foods and DMK working together
Both cooperatives have already worked together in various areas, including through a joint venture called ArNoCo. In this venture, whey from cheese production at DMK is processed, from which high-quality protein concentrates and lactose are made for Arla’s globally operating ingredients division.
Arla chairman Jan Toft Nørgaard says he sees DMK as the perfect partner to create a new and stronger Arla. DMK chairman Heinz Korte sees the merger as an opportunity to strengthen the companies themselves and the competitive position of the affiliated farmers.
DMK is present in the Netherlands through DOC. DOC Cheese is a co-owner of DMK. In the Netherlands, Arla has the Melkunie brand, among other things. The company’s Dutch turnover is €407 million.
