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March 20, 2015

DMK, DOC Kaas reconsider merger

European dairy co-operatives DMK and DOC Kaas are revisiting proposals to merge their operations.

European dairy co-operatives DMK and DOC Kaas are revisiting proposals to merge their operations.

The German and Dutch dairy co-operatives had previously looked at the possibility of merging their businesses in 2011, when discussions failed to secure backing of DOC Kaas' farmer-owners.

However, DOC Kaas suggested yesterday (19 March) the terms of the latest proposal would be more appealing to its farmers.

Of note, DOC Kaas' and DMK's businesses will remain independent under the plan. "Provision is made that the two co-operative parent companies… remain independent," DMK said. DOC Kaas added it would operate as a 100%-owned subsidiary of the German dairy but would retain its "name and identity".

In 2011, DMK farmers reportedly also received a lower payment than DOC Kaas farmers. This differential has now closed. Payment parity will continue, although there is room for different surcharges payable DOC Kaas and DMK, the co-operatives indicated.

The merger deal will now be put to DOC Kaas' 1,200 members. If approval is given, the merger is still pending regulatory and competition approval.

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