Arla to sell packaging business in move away from non-dairy interests

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Arla to sell packaging business in move away from non-dairy interests
Arla Foods has agreed a deal to sell its packaging subsidiary Danapak Flexibles in its latest effort to dispose of businesses that "do not have a direct link to dairy production."

Danish-Swedish dairy cooperative Arla announced yesterday that it has reached an agreement with Austrian firm Schur Flexibles to sell Danapak for an undisclosed fee.

Arla expects the takeover, which is subject to approval by the relevant competition authorities, to be completed by July 1 2014.

Danapak, which boasts 190 employees and production and printing facilities in Denmark, manufactures a wide range of flexible packaging for the dairy, food, and pharmaceutical industries.

Among its customers are GlaxoSmithKline (GSK), Nestlé, and its parent company, Arla, to whom its supplies packaging for products such as Lurpak brand butter and Costello brand cheese.

"Win-win situation"

After a period of holding a minority stake in Danapak, established by the Danish Dairy Board in 1955, Arla Foods took full control of the company in 2009 with the intention of preparing the company for sale to the "right buyer within the packaging industry."

“We believe this is a ‘win-win’ situation for all parties involved – for Danapak, for Schur Flexibles and for Arla," ​said Povl Krogsgaard, vice CEO, Arla Foods.

"Over the past several years Arla has sold off subsidiaries that do not have a direct link to dairy production in order to focus on our core business. Since it is not within Arla’s core business to produce packaging, we are no longer the right owner of Danapak, who will be better suited under new ownership that can take the company to the next level in its future development,”​ ​Krogsgaard added.

Dairy market access

Acquiring Danapak will likely open up the dairy market for Schur, which until now has focused on the meat, bakery, cereals, frozen foods, confectionery, healthcare and tobacco.

If completed, its takeover of Danapak will be the third such deal in twelve months.

Earlier this year, Schur acquired Slovakian flexible packaging manufacturer Moneta-S, and in 2013 the company purchased a majority stake in Greek flexible packaging firm, Alfa-Beta Roto.

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