International dairy giant Arla Foods has announced plans to merge with Germany’s DMK Group. The new partnership, involving more than 12,000 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg, and the Netherlands, aims to create the largest dairy cooperative in Europe. According to the joint statement from both groups, the merger is set to generate a combined pro-forma revenue of approximately €19bn. The deal is currently subject to regulatory approval and will require endorsement from the board of representatives in both cooperatives during June.
Following the merger, the enlarged entity will operate under the Arla brand and be headquartered in Viby J, Denmark. Arla CEO Peder Tuborgh is slated to become the new group’s chief executive, while DMK CEO Ingo Müller will serve as the Executive Vice President for post-merger integration. Industry leaders view this tie-up as a strategic “win-win” that leverages the strengths of both cooperatives. Jan Toft Nørgaard, Arla’s chair, highlighted the shared focus on quality and innovation, which he believes will be pivotal in driving the new cooperative’s success in a challenging European dairy landscape.
The merger is expected to unlock significant synergies and expand market access. DMK’s strong presence in Germany and the Netherlands will complement Arla’s global reach, providing the combined entity with enhanced resilience against anticipated declines in the European milk pool. Müller emphasized that the merger would allow the group to tap into new markets and improve business resilience through the adoption of advanced dairy technologies. The two organizations have previously collaborated on projects such as the ArNoCo joint venture, which processes whey from DMK’s cheese production into valuable ingredients for Arla’s global operations.
In 2024, Arla reported revenues of €13.8bn, a marginal increase from the previous year, while DMK generated €5.1bn, down slightly from €5.5bn in 2023. Combined, this merger positions the new dairy cooperative to become a dominant player in the European dairy market, supporting a diverse portfolio that includes well-known brands such as Lurpak, Puck, Castello, Milram, and others. The merger is seen as a proactive step to safeguard against volatility in the overall European milk market and to foster a more sustainable and competitive dairy sector.
The deal represents the latest in a series of consolidation efforts within the European dairy industry. As the market faces challenges from fluctuating milk prices and shifting consumer preferences, industry insiders expect that the merged entity’s scale and enhanced operational synergies will create a more robust foundation for future investments in research, innovation, and sustainability. Additionally, the merger could set a precedent for further collaborations among European dairy producers, reinforcing the region’s competitiveness in a global market that is increasingly volatile.
