Arla Foods has made an offer to purchase southern Allgäuland-Käsereien

Arla Foods has made an offer to purchase southern Allgäuland-Käsereien

Arla Foods has made an offer to purchase southern German dairy company Allgäuland-Käsereien.

The Danish-Swedish co-operative said a successful acquisition would result in it increasing its presence on the German market.

Arla's offer will be presented to the Allgäuland milk producers. Terms of the offer were not disclosed.

In a letter to the dairy farmers, Allgäuland-Käsereiens chairman Kuno Rumpel, said: "We are very pleased to receive Arla's offer because the planned acquisition is not only an important but also a necessary step towards ensuring the future of our company. In Arla Foods we are also getting a strong partner."

Allgäuland-Käsereien will hold a general meeting at which its milk producers will make a decision regarding the purchase offer. If they decide to accept the bid, the acquisition will be subject to approval by the EU competition authorities before the deal can be complete.

Arla said that, against a tough financial background for the German firm, the two sides had been in talks for months.

"We have issued a specific offer to purchase, which ensures that we can continue the activities in Allgäuland on a rational financial basis," said Tim Ørting Jørgensen, group director of Arla Foods International.

"We see important potential in Allgäuland-Käsereien's cheese production. They produce excellent speciality cheeses for which there is important international potential and it is for this reason that the dairy is of interest to Arla Foods.

"Some of their products will supplement the cheeses Arla already makes, among them the cheeses marketed under the House of Castello quality brand. We see great potential in Allgäuland's products and not only in Germany. Due to our strong international setup we will be able to complement our existing portfolio and offer these products to consumers and customers in international markets."

Earlier this year, Arla merged with another German dairy, Hansa-Milch, which produces only fresh dairy products.