Arla Foods: Lurpak maker plans €19bn merger
Arla Foods, the group behind brands such as Lurpak and Cravendale, has announced a merger which could create a €19bn giant.
The Swedish-Danish diary co-operative, whose UK headquarters is in Leeds, has revealed plans to merge with Germany-headquartered DMK Group.
If it goes ahead, the merger would bring together 12,000 farmers across Europe with the aim to achieve a combined pro forma revenue of €19bn.
The merger is subject to approval from the board of representatives in the cooperatives as well as regulatory approval.
Jan Toft Nørgaard, chair of Arla Foods, said: “The foundation of this partnership is formed by our shared values, and I am immensely proud of this proposed merger, which is a win-win for our cooperatives.
“The strength of both Arla and DMK Group lies in our shared commitment to quality and innovation, and I see DMK Group as the perfect partner in shaping a new and strengthened Arla, poised to lead in the dairy industry.”
Arla Foods overcomes social media boycott
The merger news comes after Arla Foods announced plans in February to close one of its UK sites with the loss of up to 128 jobs.
However, the co-operative also confirmed plans to invest almost £90m into its Lockerbie site in Scotland.
That came after The news comes after City PM reported that Arla Foods was looking to make “efficiencies” of up to €110m (£91.1m) in 2025 as it battles rising prices and consumer uncertainty.
Arla Foods faced calls for a boycott in November 2024 after it announced it would test Bovaer, a feed additive, on some of its cows in the UK. The boycott was due to misinformation about the safety of Bovaer.
Heinz Korte, chair of DMK Group, said: “We are proud of the planned merger with Arla, a cooperative that shares our commitment to innovation and optimal value creation.
“This partnership strengthens the resilience of our cooperatives and significantly contributes to strengthening the competitiveness of our farmers.
“Together, we can expand our reach for our dairy products, thus improving our offering and jointly driving the further development of innovative products for the benefit of our members.”
Joint venture name and leadership revealed
If approved, the merged entity will carry the Arla name and be headquartered in Viby J in Denmark. Jan Toft Nørgaard will be its chair, Peder Tuborgh its CEO, and Ingo Müller will step into the Arla executive management team as executive vice president of post-merger integration.
Tuborgh, CEO of Arla Foods, added: “DMK Group is the largest dairy cooperative in Germany and a very attractive partner that shares our core values.
“Our strong market positions and product portfolios complement each other very well and our strong partnership in recent years has proven that DMK Group is an ideal partner for Arla.
“Our joint market presence in Europe and globally will enable us to safeguard our production of healthy dairy products, ensuring stable food production in Europe, as well as bringing even more nutritious products to the world and our customers.
“This merger is a natural continuation of our strong collaboration to the benefit of consumers, our farmers and their milk price.”
Ingo Müller, CEO of DMK Group, said: “Arla has established itself as a key player in the dairy industry, and by partnering up we will have a strong and attractive branded and private label product portfolio for all our customers.
“Through Arla’s global reach we can access consumers and customers beyond our current geographical reach as well as strengthening our business resilience.
“Our complementary strengths, both in business and mindset, will enable us to keep advancing in dairy technology and innovation, while also providing a strong home for farmers.”