European dairy giants DMK and Arla to merge

Arla Foods and the German DMK Group have announced their merger. This will create the largest dairy cooperative in Europe, with more than 12.000 dairy farmers and a combined turnover of €19 billion. The new company will continue under the name Arla and its head office will be in Denmark. DOC Cheese is also part of the merger. 

According to the boards of both cooperatives, the merger will provide more stability in milk prices and room for investments in sustainability, innovation and product development. The combined milk supply is described as solid, which benefits the financial strength.

'Perfect partner'
Jan Toft Nørgaard, chairman of the supervisory board of Arla, describes the planned merger as a win-win situation and sees DMK as the perfect partner. Arla CEO Peder Tuborgh believes that the merger will strengthen the competitive position in the market by joining forces. 

The Dutch dairy cooperative DOC Kaas is also part of the merger process. According to Guus Mensink, chairman of DOC Kaas, the merger brings economies of scale, added value for the members and a stronger milk price. "This merger strengthens the resilience of our cooperatives and with this we can expand our range of dairy products," Mensink said in a press release.

Joint venture
Arla and DMK have been working together successfully for some time, including through the joint venture ArNoCo. Here, DMK whey is processed into high-quality ingredients for Arla's global customers. The merged company will continue under the name Arla and its headquarters will be in the Danish city of Viby. CEO Tuborgh will remain as CEO and DMK CEO Ingo Müller will join Arla's management team.

Voting in June
The expectation is that the final agreement will be voted on in June 2025. The merger is still subject to approval by the general meetings of the cooperatives and also supervisors. 

Read in this analysis more about the announced merger based on five conclusions.  

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.