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September 16, 2022

Arla Foods rebuts FrieslandCampina merger talks reports

The Denmark-based co-op said stories of discussions with its Dutch peer over a possible deal were “100% false”.

By Dean Best

Arla Foods has rebuffed reports the company has had exploratory merger talks with fellow European dairy major FrieslandCampina.

Media reports in the Netherlands said yesterday (15 September) the co-operatives’ chairmen have held discussions over a possible combination of the two businesses, a move that would create one of the world’s largest dairy groups by revenue.

Approached by Just Food today, a spokesperson for FrieslandCampina declined to comment on what he described as “rumours and speculation”. However, a counterpart at Arla Foods was more forthright.

“It’s completely false,” a spokesperson for the Denmark-based company said. “It’s 100% inaccurate. There is no basis to these stories whatsoever.”

Arla Foods and FrieslandCampina are among the top ten global dairy companies, measured by annual sales.

In 2021, Arla Foods – home to brands including Lurpak butter and Castello cheese – generated revenue of EUR11.2bn (US$11.2bn), up 5.7% on a year earlier. Its profit for the year was down 2% at EUR346m.

FrieslandCampina, which owns brands such as Milner cheese and Friso infant formula, saw its revenue hit EUR11.5bn in 2021, 3.2% higher than the previous year. The company’s net profit was more than double that posted in 2020, reaching EUR172m.

In 2005, Arla Foods and the then Campina co-operative abandoned plans to join forces, four months after revealing they were in talks.

Three years later, Campina and fellow Dutch dairy group Friesland Foods struck a deal to merge, a deal that secured EU approval in December 2008.

France’s Lactalis is currently the largest dairy company worldwide. In 2021, the privately-owned business generated turnover of EUR22bn, up 4.2% on a year earlier. Net profit increased 4% to EUR445m.

So far in 2022, Lactalis has agreed deals to acquire Australian yogurt maker Jalna, a clutch of assets from German cooperative Bayerische Milchindustrie and Italian cheese group Ambrosi.

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