Arla in Merger Talks with Milko

SWEDEN - Swedish dairy companies Arla Foods and Milko have announced that they are in discussions over the terms of a merger in a move taken as a result of Milko’s deteriorating financial position, according to John Keane, Manager, Bord Bia Milan.

20 June 2011

2 minute read

Europe

Milko has had financial difficulties in recent years and was forced to implement several comprehensive cost cutting measures.

In announcing the merger talks the chairman of Milko noted that the company had a responsibility to find solutions which would offer its members the best possible market outlets and prices for their milk.

Milko is owned by around 650 dairy farmers in Sweden and they must approve of any proposed merger at an extraordinary general meeting.

Due to the dominant position of Milko and Arla on the Swedish dairy market the approval of the Swedish competition Authority will also be required.

Arla Foods is a global dairy company and cooperative owned by Danish, Swedish, and German dairy farmers.

It has production facilities in 13 countries and sales offices in a further 20 with a total of over 16,000 employees.

Some of its better known brands include Lurpak & Arla. In comparison, Milko is a relatively small player in the Swedish dairy market.

Arla Foods was formed in 2000 as a result of a merger between the Swedish dairy cooperative Arla & the Danish dairy company MD Foods.

Since then Arla Foods has made several acquisitions including a merger with Express Dairies in the UK in 2007 & a merger with the German dairy company Hansa Milch earlier this year. Arla Foods is now the 7th largest dairy company in the world.