Arla Foods has acquired a stake in Brazilian dairy company Vigor Alimentos.

Until now, Arla had been in a local 50:50 joint venture with Vigor under the name Dan Vigor. The Scandinavian dairy co-op is now exchanging the joint ownership of Dan Vigor for an 8% share of Vigor.

“The new agreement with Vigor is similar to the one we have with Mengniu in China – only this time it hasn’t been necessary for us to find additional funding. Vigor is one of Brazil’s leading dairy producers with a first class distribution network. We have a history of excellent cooperation and it’s a natural step for us to further build on this partnership to explore the great potential in Brazil,” said Finn Hansen, head of Arla’s international markets.

Arla added its ambition is to accelerate its export of products to Brazil and increase its share of he Brazilian dairy market. The agreement will see the creation of a new business unit which will focus on the marketing and sales of imported products and brands, which will be distributed through Vigor’s channels.

Steffen Andersen, responsible for Arla’s so-called “value markets”, said: “Together with Vigor, we see a great opportunity to create leading positions for our global brands Arla, Lurpak and Castello.”

Vigor was spun out off Brazilian meat giant JBS in 2012. JBS still holds a stake in the business. Reflecting on the deal with Arla, Vigor said it would lead to a “significant evolution in the innovation process” and help it “focus on new product development, brand management and investments more effectively”.

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