Owned by 7,200 farmers in Denmark and Sweden, Arla is one of the largest dairy processors in Europe with a 6.5 per cent share of the European market. And Hansa-Milch is a smaller German co-op with around 1000 members and 400 employees.
Arla said it is pursuing a merger with the smaller company in order to establish a greater presence in the German market.
In a statement, Arla said that in order to maximize the price it pays to its farmers, “Arla needs to grow its business further within Europe, and particularly in the important German market. Arla would be able to expand its presence in Germany through a merger with Hansa-Milch.”
As both dairies are co-operatives a decision on whether to go ahead with the tie-up will be taken by the member farmers. A vote is set for February-March next year.
More on this story will follow next week.