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Giant Arla wants to swallow smaller Milko in an attempt to merge



  

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Thursday, 09 June 2011
The small Swedish dairy Milko is to be swallowed by the giant market leader, Danish – Swedish Arla Foods. The dairy companies said of the merger that it was a strategic decision in an announcement this morning at a joint press conference in Stockholm.

Milko's economy is poor and therefore the merger is necessary, according to Milko management. The boards of both companies are backing the resolution.

650 farmers provide 250 million kg of milk per year to Milko, a dairy which also has 336 employees. Compared to Arla Sweden, it has 3529 members who annually deliver some 1.894 billion kg of milk from several dairies. Arla Foods has 3200 employees in Sweden.

President of Milko, Lars Reyier says that the dairy has long enjoyed an economy that was not been in balance.
“As elected officers, it is both our duty and responsibility to seek modern and prestigious was to address the structural changes in the dairy market, which ensures our owners the best sales and earnings for their milk,” he said.

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It is intended that shareholders in Milko and Arla come under the same conditions as the current one. And once the merger is a reality and approved by the Swedish competition authorities, the new members get Arla’s milk price.

Chairman of Arla Foods Ake Hantoft said that Arla has both strength and structure to develop Milko and take as much milk as the new members can provide.

“A merger would be in line with our ambition to be Sweden's food leader and would create preconditions for continued milk production in the area,” said �ke Hantoft.

It is not the first time the two dairies have tried to do business. Milko and Arla earlier this year agreed that Arla buys Milko’s dairy in Sundsvall, sweden.
By Scancomark.se Team


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