Sunday 21 October 2012
Danish-Devon milk merger
The European Commission has approved the merger of Danish head-quartered co-op Arla and British co-op Milk Link.
This is subject to Arla disposing of Milk Link's drinks business, based at Crediton, in order to satisfy competition concerns expressed by the Commission. The merger is expected to be completed this week.
This merger in Britain amalgamates almost 25% of Britain's entire milk pool and follows Muller's recent acquisition of Robert Wiseman, which accounted for 30% of the British liquid milk market.
With two of the four main British liquid milk/dairy processors (Wiseman and Milk Link) taken over this year, all eyes remain on Dairy Crest. However, its financial pressures have abated following the recent €430m sale of its French spreads business, St Huberts.
Arla are also in the process of merging with German co-op Milch-Union Hocheifel (MUH), which, if completed, will create a combined co-op that will process over 12 billion litres annually.
Earlier this year, Arla made a 1.7 billion Danish Kroner (€228m) investment in China's leading dairy company, Mengniu Dairy Company Ltd, in return for a 6% stake in the business.
This gives Arla access to the 300 million strong middle class in China which is projected to grow to n by 2025.
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