Boards of representatives in Arla Foods & DMK Group approve merger plan

DENMARK – Arla Foods, a dairy cooperative, has announced that decision-making bodies have voted in favour of the planned Arla Foods & DMK Group merger.

Arla Foods and Germany’s DMK Group unveiled plans to merge, creating what is set to become Europe’s largest dairy cooperative. The merger aims to strengthen the competitive position of both cooperatives in a challenging global market. 

“The potential merger is a significant milestone in bringing together two cooperatives with shared values and highly complementary strengths, setting the stage for a new era in European dairy, where we will deliver even greater value to our members, colleagues, customers, and consumers,” said Peder Tuborgh, CEO of Arla Foods. 

According to a joint statement, the merger will enhance production capabilities and ensure a stable milk price for farmers while expanding their reach to consumers worldwide.

The merged entity will operate under the Arla name, with its headquarters remaining in Denmark.

Jan Toft Nørgaard, Current Chair of Arla Foods, will lead the new cooperative, while DMK’s CEO Ingo Müller will join the executive team to oversee integration. 

“This merger strengthens our resilience and competitiveness, benefiting our farmers and consumers alike,” Müller stated.

Additionally, the merger could help address declining milk volumes in Europe by diversifying product portfolios, which include both traditional dairy and plant-based options. 

“We have already seen the benefits of working together through our ArNoCo joint venture. Now, by joining forces, we can accelerate innovation and deliver high-quality, nutritious products to more people, while supporting a strong milk price for our farmer-owners,” Peder said.

He also noted that the merger will proceed to regulatory approval.

Recently, Arla Foods reported an increase in revenue for 2024 and projected further growth in 2025, attributing the positive outlook to higher dairy prices.

According to a report by Arla, revenue for 2024 reached 13.8 billion euros (US$14.43 billion), slightly higher than the 13.7 billion euros recorded in 2023. 

The company forecasted that revenue would rise to between 14.5 billion and 15.3 billion euros in 2025, with growth expected to be driven by sustained high dairy prices. 

The cooperative, owned by 7,600 dairy farmers across seven northern European countries, also increased its dividend payout for 2024 to a record level.

Subscribe to receive our email newsletters with the latest news and insights from Africa, the Middle East and around the world. SUBSCRIBE HERE