Dairy firms Arla Foods and Germany’s DMK Group have announced their intention to merge, creating “the strongest dairy cooperative in Europe”. 

The merger will bring together more than 12,000 farmers, with the companies aiming to become one joint cooperative that will achieve combined revenue of €19bn (£16.3bn).

The merged entity will carry the Arla name and current Arla Foods chair Jan Toft Nørgaard will be chair. Arla chief executive Peder Tuborgh will be CEO, and DMK Group chief executive Ingo Müller will step into the executive management team as EVP of post-merger integration.

The merger is subject to approval from the board of representatives in the cooperatives, as well as to regulatory approval.

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Arla Foods and DMK Group have successfully collaborated on several projects in recent years, including the joint venture project ArNoCo, which processes whey from DMK’s cheese production into high-quality whey protein concentrate and lactose for Arla’s global ingredients business.

Tuborgh said: “DMK Group is the largest dairy cooperative in Germany and a very attractive partner that shares our core values. 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.”

Müller added: “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.”