Denmark-headquartered Arla Foods and Germany’s DMK Group are moving forward with their plans to merge after securing EU approval for the deal.
The two cooperatives confirmed receiving the green light in a joint statement after the European Commission “unconditionally approved” the deal yesterday (28 May).
Brussels concluded the transaction would raise no competition concerns in the European Economic Area (EEA).
The merger, first announced in April last year, is set to take effect on 1 June. Until an expected two-year integration process is completed, the companies will continue to operate as two independent entities.
Arla Foods’ chair Jan Toft Nørgaard said: “This is a landmark day for our cooperatives, for the next generation of dairy farmers and for European food production.
“We can move forward together to secure the necessary scale, long-term economic resilience and investment capability required to contribute to shaping a food sector with a reduced impact on climate and nature.”
The merger will create “the largest dairy cooperative in Europe”, bringing together 11,200 dairy farmers across seven European countries.
The combined group will have a milk pool of 19.4 billion kg a year and pro-forma revenue of more than €20bn ($23.2bn).
It will operate under the Arla name and employ around 28,800 people globally.
The companies said the tie-up is intended to secure “stable dairy farming and production” in Europe and “strengthen their ability” to deliver value to people worldwide via global dairy brands.
They described the combination as “vital” for European food security amid “geopolitical and economic shifts”.
DMK Group CEO Ingo Müller said: “The merger will sharpen our technological edge, accelerate innovation, and open new opportunities for growth and collaboration, powered by our shared brands, deep category expertise, and the complementary strengths of DMK and Arla.
“With a collaborative culture and a strengthened position in our markets, we will be even more a pillar of strength in ensuring the secure supply of food for people in Europe and globally.”
The merged cooperative will be headquartered in Viby J in Denmark.
Nørgaard will serve as chair, and Arla Foods’ chief executive Peder Tuborgh as CEO. Once the integration process is completed, DMK’s Müller will join Arla’s executive management team as executive vice president.
Meanwhile, both co-ops have been investing to expand production in recent months.
Earlier this month, Arla Foods’ venture in Australia struck a deal to acquire Australian cottage cheese producer Brancourts.