Arla plans huge merger

Dairy giant looks to milk UK and German markets

May 23rd, 2012 11:27 am| by admin

The Danish-Swedish dairy cooperative Arla Foods announced in a statement that it is planning two mergers. If approved, Arla plans to engulf Milch-Union Hocheifel, Germany's eighth-largest dairy, and Milk Link, the fourth-largest dairy in Britain. The mergers would increase Arla's annual revenue by nine billion kroner.

“Each of these three companies seek to create value for shareholders in the form of strong milk prices,” Peder Tuborgh, Arla’s chief executive, said in a statement. “If these plans are realised, our futures and ability to deliver results will be strengthened.”

The mergers would make Arla the UK's largest dairy company and the third largest in Germany. The amount of milk handled by the company will increase from nine to 12 billion kilos.

“The strength and value of a co-operative dairy becoming one of the world’s leading dairy companies can not be underestimated,” said Arla chairman Åke Hantoft.

Arla and its acquisition targets are co-operatives, so any mergers must be approved by shareholders at all three companies. A vote on the mergers is expected to take place on June 26.

Arla's 150 board members from Sweden, Denmark and Germany were informed about the merger plans on Monday.

“I dare not predict how the shareholders will vote,” Hantoft told the Swedish news agency TT. “I respect the democratic process. It's not only up to us to decide, the other companies must agree.”

Hantoft said that since the other companies involved will essentially be swallowed up by Arla, getting shareholders to agree may take a bit of work.

If the companies manage to convince shareholders that the mergers should go through, the deal would still need regulatory approval.

If the mergers happen, Arla will gain its first co-op members in Britain, Belgium and Luxembourg. The company’s German holdings will also be significantly expanded.

Arla currently has 8,024 shareholders. That figure would increase to about 12,000 after the mergers.

Bohr, photographed in 1948 at Princeton University aged 63, saw out the latter years of his career in the US, promoting the peaceful application of atomic energy (photo: Princeton University/American Institute of Physics/Science Photo Library)
Atomic scientist’s quantum leap changed the world of physics forever
For such a tiny country, Denmark certainly punches above its weight, and th...
A tragedy in Copenhagen this afternoon (photo:PDP)
Mother of four stabbed to death in Copenhagen
A 51-year-old woman has been stabbed to death in an apartment in Nørrebro ...
German conductor Hartmut Haenchen warned against cuts from the Royal Orchestra (photo:  Riccardo Musacchio)
Musicians and maestros condemn cuts at the Royal Danish Theatre
The musicians at Det Kongelige Kapel, which is internationally known and ac...
Not rolling tomorrow (photo: Hochgeladen von Heb)
The postman may not ring at all in Copenhagen tomorrow
Some Copenhagen residents will see neither post nor packages tomorrow as ab...
Grejfreak has moved on from its original idea of selling military gear (photo: Bonzo)
Aarhus veteran cashing in on military gear
Kristian Juel Rasmussen came back from his deployment with the Danish milit...
Basking sharks are rare in Danish waters these days (photo: Anders Peter Schultz, Statens Naturhistoriske Museum)
Massive shark caught off Danish coast
A huge four-metre long shark was caught in Kattegat Strait off the coast o...