SWEDEN/GERMANY: Arla bid for Allgauland hits obstacle
Allgäuland-Käsereien has rejected an offer from Arla Foods to buy the company.
A group of shareholders in German dairy co-op Allgäuland-Käsereien has rejected the takeover bid from Arla Foods.
Arla, the Danish-Swedish co-operative, made the move for Allgäuland-Käsereien in July in a bid to increase its presence in the German market.
Five of the six co-operative groups that comprise Allgäuland-Käsereien accepted the offer, terms of which were not disclosed. However, only voted 69% of the sixth group voted in favour, short of the 75% majority needed.
An Arla spokesman said today (2 September) that the company would not change the terms of the offer and would wait for Allgäuland-Käsereien to handle the matter internally.
The spokesman said: "We have been informed by the management that the sixth co-operative will have a process within themselves and vote again on 12 September. We also have information from the management that some of the farmers have signed with competing dairies, which leaves them with other interests.
He added: "We have presented a bid which we think will present a good future for Allgäuland-Käsereien, its farmers and also for us.”
A spokesperson for Allgäuland-Käsereien said the farmers who have signed with competing dairies are contracted to them until the end of 2011 and 2012, although she insisted the agreements would not affect the potential sale to Arla.
Arla yesterday posted a profit of DKK497m (US$95m) for the first six months of 2011, a fall from the same period in 2010, where profit hit DKK697m.
Earlier this year, Arla expanded into its operations in Germany when it merged with Hansa-Milch, which produces fresh dairy products in north of the country.
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