International dairy giant Arla Foods is set to merge with German dairy cooperative DMK Group, forming an entity of more than 12,000 farmers across seven countries.
The pair said in a joint statement the deal will create “the largest dairy cooperative in Europe”, with members in Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands.
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The merger is subject to regulatory approval and the backing of the board of representatives in both cooperatives in June.
It could bring a combined pro-forma revenue of €19bn ($20.75bn) to the new entity, which will carry the Arla name and be headquartered in Viby J, Denmark.
Arla CEO Peder Tuborgh will be the new group’s chief executive. DMK CEO Ingo Müller will lead the Arla executive management team as EVP of post-merger integration.
The proposed deal is the latest transaction announced between two major dairy groups in Europe.
In December, Dutch dairy cooperative FrieslandCampina set out plans to merge with Belgian peer Milcobel.
Jan Toft Nørgaard, the chair of Arla, called the merger a “win-win” for both 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,” he added.
Müller said the merger would open up new markets. “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,” he said.
The two cooperatives have worked together in the past, including on the ArNoCo joint venture to process whey from DMK’s cheese production into whey protein concentrate and lactose for Arla’s global ingredients business.
The pair believe the merger will provide resilience through an anticipated decline in the overall European milk pool.
Speaking to Just Food, Arla confirmed the proposed merger would not impact its offer for a majority stake in Egyptian food-and-beverage company Arabian Food Industries, known as Domty.
In 2024, Arla’s revenues reached €13.8bn ($14.39bn), a rise on the €13.7bn generated a year earlier.
The group produces some 13.7bn kilograms of milk per year and holds the brands Arla, Lurpak, Puck and Castello. The co-op is owned by its more than 7,600 farmers.
DMK employs around 6,800 staff at more than 20 locations mainly in Germany and the Netherlands.
In 2024, DMK generated revenue of €5.1bn, down from €5.5bn a year earlier. Its brands include Milram, Oldenburger, Uniekaas, Alete Bewusst and Humana.
