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April 10, 2008

NETHERLANDS: Friesland and Campina strike merger deal

The Netherlands’ two largest dairy groups, Friesland Foods and Campina, have announced plans to merge operations in a move designed to increase global competitiveness.

The Netherlands’ two largest dairy groups, Friesland Foods and Campina, have announced plans to merge operations in a move designed to increase global competitiveness. 

The new group, to be called FrieslandCampina, will be one of the world’s largest dairy companies with combined sales of EUR9.1bn (US$14.3bn), 22,000 employees, 17,000 member farmers over 100 production and distribution facilities worldwide.

The deal will bring together Friesland’s Dutch Lady and Frisian Flag brands and Campina’s Milner cheese and Optimel yoghurt brands.

In a statement released today (10 April) the company said it anticipates cutting 500 jobs by 2011 and reaching annual synergies of EUR175m by 2012.

Speaking to just-food, Campina spokesperson Gerjan Zeissink said that the merger is a response to changing consumer behaviour, new challenges in the dairy ingredients sector and changing EU dairy policy. 

“We are not afraid of these changes. We see them as new opportunities, which we can capitalise on better together than alone,” Zeissink said.

“The end of EU dairy quotas will enable farmers to respond to growing global demand. We hope to exploit possibilities in markets like Asia, which is important for our ingredients businesses. The merger will enable us to go to new regions with innovations we have made in Europe,” Zeissink told just-food this afternoon.

Friesland and Campina are owned by their member farmers and the merger will be financed by member certificates and member bonds.

The farmers will vote on the merger at a general meeting on 7 May.

The companies said they expected the European Commission to rule on the merger in the fourth quarter.

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