Arla makes move on German dairy to aid European growth

By Helen Glaberson

- Last updated on GMT

Related tags Arla foods Denmark European union Board of directors Arla

An increased product portfolio and a larger European footprint are two benefits the German acquisition of Allgäuland-Käsereien will bring Arla Foods if its bid is cleared, says the dairy giant.

Suffering from a “financially difficult situation​”, southern German company Allgäuland-Käsereien has been involved in discussions and negotiations with Arla for several months, said the Denmark-based dairy co-op.

Expanded portfolio

Allgäuland-Käsereien will allow Arla to introduce new cheese to its portfolio, Torben Olsen, managing director for Arla Germany told

The German dairy is based in a region where there are a lot of speciality cheeses such as Emmental and Mountain cheese that are not possible to produce in Denmark.

Already exporting to 100 countries, Arla has plans to introduce these Allgäuland-Käsereien’s products globally.

The products will have particular potential in countries such as US, Canada, Australia where Arla​already has a strong positioning, he said.

The managing director said the company had plans to invest in new equipment at Allgäuland-Käsereien, saying that Allgäuland-Käsereien’s production facilities​were not currently up to Arla foods’ “high standards​”.

He said the firm could not give any further details.

Next step

The step towards the possible deal will see Arla’s offer being presented to the Allgäuland milk producers.

Allgäuland-Käsereien will then hold a general meeting at which its milk producers will make a decision regarding the purchase offer.

If they decide to accept the bid, the acquisition will be subject to approval by the EU competition authorities.

Olsen said the deal should be completed in the next few months.

“We are very pleased to receive Arla’s offer because the planned acquisition is not only an important but also a necessary step towards ensuring the future of our company. In Arla Foods we are also getting a strong partner,”​ said chairman of the board of Allgäuland-Käsereiens board chairman Kuno Rumpel in a letter to the dairy farmers.

Recent acquisitions

Last month the firm said it was in talks with another struggling dairy, Swedish firm Milko when a slump in Swedish milk demand at the beginning of the year prompted the co-op to contact Arla proposing a merger.

Earlier this year Arla also merged with another German company, Hansa-Milch.

Arla said its aim is to become one of the largest dairies in Germany with a strategy focused on growth within cheese.

Olsen said Arla was currently considering other acquisitions in the region although he could not provide any further details.

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