NETHERLANDS – Danish dairy giant Arla has denied reports indicating the company has had exploratory merger talks with fellow European dairy major FrieslandCampina.

A spokesperson for Arla said, “it’s completely false,100% inaccurate, and there is no basis to these stories whatsoever.”

This is after media reports in the Netherlands said yesterday the co-operatives’ chairmen have held discussions over a possible combination of the two businesses, a move that would create one of the world’s largest dairy groups by revenue.

Also, FrieslandCampina’s spokesperson described the reports as “rumors and speculation.”

Arla Foods and FrieslandCampina are among the top ten global dairy companies, measured by annual sales.

In 2021, Arla Foods – home to brands including Lurpak butter and Castello cheese – generated revenue of EUR11.2bn (US$11.2bn), up 5.7% from a year earlier. Its profit for the year was down 2% at EUR346m.

FrieslandCampina, which owns brands such as Milner cheese and Friso infant formula, saw its revenue hit EUR11.5bn in 2021, 3.2% higher than the previous year. The company’s net profit was more than doubled thr that posted in 2020, reaching EUR172m.

In 2005, Arla Foods and the then Campina co-operative abandoned plans to join forces, four months after revealing they were in talks.

In 2008, Friesland Foods merged with Campina, under the new name of FrieslandCampina, which was approved by the European Commission approved on December 2008, on the condition that the new company divests some activities.

This year both Arla and FrieslandCampina have had a great share in investments and divestments in the dairy industry just to maintain their position in the market.

Recently, Arla Foods invested €41 million (US$43.34M) to expand the production capacity of its Esbjerg, Denmark, dairy to meet “increased global demand” for on-the-go, chilled coffee drinks.

The company also committed a €190 million (US$204 million) investment to building a new production facility in Germany to meet the demand for sustainable and nutritious dairy products.

Whereas FrieslandCampina divested its infant-formula factory in Xiushui, China to local peer Inner Mongolia Yili Group and parts of its German consumer business to privately owned German dairy company, Müller, to focus on its best-performing international cheese and milk businesses.

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