Arla merges with Belgian cooperative

The merger with Walhorn EGM brings more dairy farmers in Belgium and Germany, and for the first time, owners in the Netherlands.

Owner-elected representatives from Arla and Walhorn EGM have agreed to the merger of the two cooperatives. The decision comes one and  a half months after the two cooperatives’ board of directors presented a proposal to merger which led to  a debate in the two owner groups.

“We are delighted to welcome the new dairy farmers to our group of owners,” says Åke Hantoft, Chairman of Arla Foods.

“Arla is a bigger business than Walhorn, but we have exactly the same desire to be part of a cooperative that enables us to grow and develop our farms. Some of Walhorn’s owners are already neighbours of Arla farmers, so in every way it feels like a natural step to merge with our colleagues at Walhorn,” says Åke Hantoft.

Following the merger, Arla will have 13,500 members. For the first time, the cooperative will have members in the Netherlands, resulting in  Arla having owners in seven different northern European countries.

Arla’s CEO Peder Tuborgh is also delighted to welcome the new members:  “We see this merger as a vote of confidence on the part of Walhorn’s dairy farmers and we are convinced that the merger will lead to a mutually beneficial partnership. At Arla, we have made a point in recent years of informing our members that they are the very core of Arla’s business foundation and that we are ready to buy all the milk they are able to produce – also when European milk quotas disappear. This message has been warmly received by Walhorn’s owners,” says Peder Tuborgh.

The merger will mainly impact Arla’s access to raw milk in Germany and Belgium and the dairies in Pronsfeld, Germany and Nijkerk in the Netherlands.

The merger, which must now be approved by the national competition authorities, is expected to go ahead in the summer.

Number of votes

In both companies, voting went through the boards of representatives. A yes required a 75% majority in both companies.

Arla

Yes votes: 174 (94 per cent)

No votes: 11 (6 per cent)

Walhorn EGM

Yes votes: 118 (96 per cent)

No votes: 5 (4 per cent)

Facts about Arla Foods

• A cooperative owned by 13,500 milk producers (incl. Walhorn’s 795 dairy farmers) in seven different countries: the UK, Sweden, Denmark, Germany, Belgium, Luxembourg and now, as a result of the merger – the Netherlands.
• Arla’s core markets are the UK, Sweden, Germany, Denmark, Finland and the Netherlands.
• In 2013, Arla’s worldwide sales of dairy products to customers and consumers totalled DKK 73.6bn.

Facts about Walhorn EGM

• A cooperative owned by 795 dairy farmers in Belgium (426), Germany (317) and the Netherlands (52).
• The company has a turnover of EUR 239m.
• Walhorn EGM collects milk from its members and sells it to the dairy Walhorn AG, which Walhorn EGM jointly owns with the privately owned dairy company Lactalis.
• EGM’s collaboration with the dairy will remain unchanged following the merger.

Arla Foods is a global dairy company and co-operative owned by 12,600 dairy farmers circa 2,800 of whom are British.

Dating back to 1881, Arla’s purpose is to secure the highest value for its farmers’ milk, while creating opportunities for their growth. With production facilities in 11 countries and sales offices in a further 30, Arla is the world’s sixth largest dairy company and largest supplier of organic dairy products. Arla has a total of more than 18,000 colleagues and its products are sold under the well-known brands Arla®, Lurpak® and Castello® in more than 100 countries.

Arla Foods UK is the largest dairy company in the country and is home to leading dairy brands Anchor, Cravendale, and Lactofree. It processes 3.5 billion litres of milk a year and has a turnover of £2.2 billion. As well as being number one in fresh liquid milk, butter, spreads and cream, Arla is the UK’s largest cheese manufacturer. It has also built the world’s largest fresh milk facility located at Aylesbury and has plans for it to be the first zero carbon site of its kind. The UK business has a team of approximately 4,000 colleagues located at its dairies, distribution centres and head office.