Friesland Foods and Campina, the Dutch dairy groups set to merge to create a EUR9.1bn (US$12.85bn) giant, today (17 December) welcomed EU clearance of the deal – but expressed “regret” that parts of their operations will have to be sold.

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After a five-month investigation into the effects of the planned merger, the European Commission earlier today gave the green light to the deal.


However, in order to quell EU concern over the merger’s impact on competition in certain European markets, Friesland and Campina will sell a clutch of businesses.


Friesland will offload its fresh dairy business in Nijkerk. Campina will sell its cheese production plant in the Netherlands and long-life dairy drink brands Yogho Yogho and Choco Choco in the Netherlands and Belgium.


In a statement today, Friesland and Campina said the businesses to be sold account for combined sales of EUR367m – or 4% of the merged company’s turnover.

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The two dairy processors also offered to ensure access to raw milk in the Netherlands.


Under these plans, Friesland and Campina said the businesses up for sale would be able to source raw milk from the merged company under a transitional supply deal.


Subsequently, the Commission said, a “Dutch Milk Fund” would be set up to ensure access to a maximum of 1.2bn kg of raw milk a year. The fund, the Commission said, would remain in place “until more structural changes in the market for raw milk were achieved”.


The Commission added that Friesland and Campina had agreed to reduce the “exit barriers” for farmers wishing to leave the merged co-operative, to be renamed FrieslandCampina.


As co-operatives, the farmer-members of both Friesland and Campina are set to vote on the merger this afternoon.


Cees ‘t Hart, who is set to become CEO of FrieslandCampina, said the two sides will grow in strength together.


“We expect to be able to grow more strongly in brands and new concepts. This not only applies to consumer products, but also to dairy ingredients,” ‘t Hart said.