VIBY, DENMARK — International dairy products manufacturers Arla Foods and DMK Group revealed they plan to merge and create “the strongest dairy cooperative in Europe.”

The companies said by combining forces they will bring together 12,000-plus dairy farmers and they anticipate achieving pro forma revenue of €19 billion ($21.2 billion USD).

The merger must receive approval from the boards of representatives at Arla and DMK, and meet regulatory requirements to become official. The boards are set to vote on the merger agreement in June.

Once the merger is official, the combined entity will operate under the Arla brand name, with headquarters in Viby, Denmark. The cooperatives said plans call for Jan Toft Nørgaard to remain chair, Peder Tuborgh to continue as chief executive officer, and DMK Group CEO Ingo Müller to join the Arla executive management team as executive vice president of post-merger integration.

The dairy companies said details of the merger proposal will be discussed with each cooperative’s members, employee representatives and works councils in the coming months.

Arla and DMK said combining their operations will allow them to “stand commercially strong and gain increased resilience through more diversified product portfolios and market positions despite the anticipated decline in the overall European milk pool,” while also strengthening partnerships with customers, farmers and business partners.

"The foundation of this partnership is formed by our shared values, and I am immensely proud of this proposed merger, which is a win-win for our cooperatives,” Toft Nørgaard said. “The strength of both Arla and DMK Group lies in our shared commitment to quality and innovation, and I see DMK Group as the perfect partner in shaping a new and strengthened Arla, poised to lead in the dairy industry."

The cooperatives said they aim to enhance dairy production and innovation both in Europe and internationally, and secure “a strong milk price for our owners.” Arla and DMK said as a merged company they plan to shape the future of dairy “for generations to come.”

The companies previously worked on projects such as a joint venture called ArNoCo that processes whey from DMK’s cheese production into high-quality whey protein concentrate and lactose for Arla’s global ingredients business.

DMK Group chair Heinz Korte said the cooperative is proud to merge with Arla.

“This partnership strengthens the resilience of our cooperatives and significantly contributes to strengthening the competitiveness of our farmers,” Korte said. “Together, we can expand our reach for our dairy products, thus improving our offering and jointly driving the further development of innovative products for the benefit of our members."

Added DMK Group CEO Müller: "Arla has established itself as a key player in the dairy industry, and by partnering up we will have a strong and attractive branded and private label product portfolio for all our customers. Through Arla’s global reach we can access consumers and customers beyond our current geographical reach, as well as strengthening our business resilience. Our complementary strengths, both in business and mindset, will enable us to keep advancing in dairy technology and innovation, while also providing a strong home for farmers.”

Arla Foods CEO Tuborgh called the merger a natural continuation of the cooperatives’ strong collaboration to the benefit of consumers, farmers and milk prices.

"DMK Group is the largest dairy cooperative in Germany and a very attractive partner that shares our core values,” Tuborgh said. “Our strong market positions and product portfolios complement each other very well and our strong partnership in recent years has proven that DMK Group is an ideal partner for Arla. Our joint market presence in Europe and globally will enable us to safeguard our production of healthy dairy products, ensuring stable food production in Europe, as well as bringing even more nutritious products to the world and our customers. This merger is a natural continuation of our strong collaboration to the benefit of consumers, our farmers and their milk price."