Arla expands in premium cheese through M&A

Arla expands in premium cheese through M&A

Arla Foods has stuck a deal to acquire Swedish cheese group Falbygdens Ost from Finnish food manufacturer Atria for an undisclosed sum.

Announcing the deal, Arla said the move was in line with its strategy to grow in premium cheese.

"Falbygdens Ost is a strategic complement to Arla's own cheese business. The decision to acquire Falbygdens Ost is in line with Arla's strategy, both globally and in Sweden, to drive its premium cheese segment. Through its acquisition, Arla is further securing that it is adding value to its farmer-owner milk and this it continues to be profitable," Henri de Sauvage, EVP of Arla's operations in Sweden, said.

The acquisition is subject to local competition approval. Arla said it expects completion in January next year "at the earliest".

Atria said it wanted to focus on its "core business" in Sweden of meat products and delicatessen, a spokesperson said. The company said the disposal would reduce its net sales by EUR52m (US$66.3m) and its EBIT by around EUR3m.

Show the press release

Arla Foods in Sweden today announces that it is acquiring cheese company Falbygdens Ost from the food company Atria Scandinavia. The acquisition is in line with Arla's strategy to drive its premium cheese segment. The acquisition is subject to approval from the Swedish Competition Authority. 

"Falbygdens Ost is a strategic complement to Arla's own cheese business. The decision to acquire Falbygdens Ost is in line with Arla's strategy, both globally and in Sweden, to drive its premium cheese segment. Through its acquisition, Arla is further securing that it is adding value to its farmer-owner milk and this it continues to be profitable," says Henri de Sauvage, Executive Vice President of Arla Foods in Sweden.

Falbygdens Ost has operations in Falköping, where they mature and process cheese by flavouring and packaging. The company buys its cheese from other manufacturers and has approximately 100 employees, sales of around SEK 470 million and is currently owned by Atria Scandinavia, which in turn is part of the listed Finnish group Atria Abp. 

"Employees at Falbygdens Ost have considerable experience in working with cheese, along with strong channels for sales of premium cheese. They represent a proud cheese-making tradition that we now wish to build upon. Falbygdens Ost has a solid foundation in its brands and its partnerships with well-known cheese producers in other countries. With Arla's expertise in innovation and production, along with its marketing and sales channels, we can work together to develop the passion for and interest in cheese of both customers and consumers," says Henri de Sauvage.

Arla will take over Falbygdens Ost on 7 January 2015 at the earliest, pending a decision from the Swedish Competition Authority. Once this decision has been made, local union negotiations can take place. 

The purchase price is not being made public.

Original source: Arla Foods