Dutch dairy business FrieslandCampina is taking a majority stake in Indonesian peer PT Ultrajaya Milk Industry.
FrieslandCampina described the deal as a “strategic partnership”, which will involve the cooperative’s Frisian Flag Indonesia (FFI) milk and flavoured drinks unit being folded into Ultrajaya.
Under that part of the transaction, Ultrajaya will assume ownership of FrieslandCampina’s 78.09% holding in FFI.
The co-op’s partners – Blue Waves Group Ventures (BWG) and PT Bahtera Wiraniaga Internusa – will transfer their shares in FFI to Ultrajaya in exchange for a rights issue.
Ultrajaya, which will remain listed on the Jakarta Stock Exchange post the transaction, is issuing more than 7.8 billion shares priced at Rp2,150 ($0.12) each under the rights issue offering.
FrieslandCampina, which owns brands such as Milner cheese and Chocomel drinks, said in a statement: “FFI will join a broader, more resilient platform serving consumers across the archipelago.
“This step supports FrieslandCampina’s mission to nourish children and families in Asia by growing access to the goodness of dairy nutrition. Both companies will continue to operate alongside each other as separate businesses, each with its own brands, portfolios, and organisations, with an intensified cooperation focused on long-term value creation.”
The Dutch group added that the Prawirawidjaja family will “remain substantial long-term shareholders” in Ultrajaya. Co-founder Sabana Prawirawidjaja will continue in his role as president director.
However, once the majority share purchase is completed, which is subject to regulatory approval in Indonesia, FrieslandCampina will “make a mandatory tender offer in cash to minority shareholders of Ultrajaya”, in accordance with local stock exchange rules.
Ultrajaya also needs to secure the approval of its shareholders to sell the “controlling” stake in the business to FrieslandCampina at a vote scheduled for 27 October.
“As part of this business group, FFI contributes to a strengthened Ultrajaya that combines strong local leadership with FrieslandCampina’s long-term partnership approach and expertise in dairy development,” the Dutch co-op added.
“The partnership with Ultrajaya builds on strong Indonesian leadership and capabilities, contributing dairy expertise and investment, while growth and decision-making remain firmly rooted in Indonesia.”
Set up in 1971, Ultrajaya produces UJ branded UHT milk, teas and health drinks at two factories – one in West Bandung and another in Cibitung, both in West Java.
Last year, the company generated sales of Rp8.77tn, compared to Rp8.87tn in the previous 12 months.
Operating profit climbed 16.7% to Rp1.68tn, while net profit was up 19% at Rp1.37tn.
Ultrajaya said in a separate exchange filing: “The proposed transaction is expected to facilitate greater collaboration in product development, nutrition expertise and local dairy industry development initiatives, while preserving the parties' respective trademarks, businesses and organisational structures.
“Through these efforts, the parties aim to promote sustainable long-term value creation, support the development of a dairy sector rooted in local conditions and needs, and contribute positively to consumer choice and the improvement of nutritional quality in Indonesia.”
Presenting annual results in February, CEO Jan Derck van Karnebeek said 2025 had been a “challenging” year, characterised by “geopolitical developments and a significant drop in commodity dairy prices”.
The co-op’s business in Asia, the Middle East, Pakistan and Africa (MEPA) saw “pressure on volumes”, although its two Europe and Retail and Americas units were “stable” amid volume growth and market share gains but with lower margins due to increased raw material costs.
FrieslandCampina’s revenue that year rose 3.6% to €13.4bn ($15.2bn) but operating profit fell 3.8% to €507m. The net result was €328m, a 2.2% increase on the previous 12 months.
