Both companies are farmer-owned dairy cooperatives. The combined entity will bring together two brands and the companies say it will expand sales opportunities for both cooperatives.
Under the terms of the agreement, Prairie Farms will merge the assets of Swiss Valley Farms into Prairie Farms Dairy, Inc.
Assets include five manufacturing plants that produce cheese and whey powder located in: Luana, Iowa; Shullsburg and Mindoro in Wisconsin; Rochester and Faribault in Minnesota.
Swiss Valley Farms CEO Chris Hoeger will continue to oversee the operation of the plants. The combined company will operate under the name Prairie Farms Dairy, Inc.
The terms of the merger agreement must be approved by cooperative members from both companies.
About the companies
Prairie Farms Dairy, Inc., headquartered in Carlinvlille, Illinois, is one of the largest dairy cooperatives in the Midwest, with more than 600 farm families, 5,700 employees, 35 manufacturing plants, more than 100 distribution facilities and annual sales of more than $3bn.
Swiss Valley Farms, based in Davenport, Iowa, has five cheese production facilities that manufacture Swiss, Baby Swiss, blue, Gorgonzola, cream cheese, Neufchatel, Gouda and sweet whey.
Swiss Valley also produces pasteurized processed cheeses, cold pack club blends, enzyme-modified cheeses and cheese analogs. Swiss Valley operates two subsidiary companies - Rochester Cheese and Caves of Faribault.
In a joint venture with Emmi-Roth, Swiss Valley Farms also operates White Hill Cheese Co., LLC in Shullsburg, Wisconsin. Swiss Valley Farms has 400 dairy producer members in Iowa, Wisconsin, Northern Illinois and Southern Minnesota.
If approved, the deal is expected to close mid-2017.