OMIRA said its long-term future and the further development of its Ravensburg and Neuburg sites will be secured by the package negotiated between the companies, which will include OMIRA's takeover by the Lactalis Group.
The final decision on the merger will be taken by OMIRA shareholders on June 22, 2017.
OMIRA said that, like many German dairies, issues with the high level of milk powder intervention stocks blocked price increases in the segment, and it was this that prompted OMIRA to intensify the partner discussions based on its 2020plus strategy.
Positives in deal
The company said a deal with Lactalis achieves several goals.
It ensures a long-term deal (10 years) for all milk producers; provides access to international markets and creates new sales channels; and further develops and invests in the sites at Ravensburg (powder and ingredients) and Neuburg (fresh milk).
OMIRA GmbH is one of the largest dairies in southern Germany and is owned by about 2,600 milk producers. At its two locations, the company processes around 835m kg of milk annually.
The company produces milk products for the international food and confectionery industry as well as for manufacturers of baby food. It also produces lactose-free dairy products.
In 2016, the French Lactalis Group generated sales of €17.3bn ($19.3bn). The company has more than 236 production sites in 44 countries and sales offices in 85 countries, with around 75,000 employees worldwide.