Denmark's Arla Plans Dairy Tie-Up With Germany's Dmk

Arla and DMK Announce Major Dairy Merger in Europe

COPENHAGEN (Reuters) - Denmark's Arla Foods plans to merge with smaller German rival DMK Group to form Europe's biggest dairy cooperative owned by more than 12,000 farmers, the two companies said in a joint statement on Tuesday.

The merged entity will carry the Arla name, and Peder Tuborgh, current Arla CEO, will become head of the company, which will be headquartered in Denmark, they said.

The joint cooperative will have a combined annual pro forma revenue of 19 billion euros ($20.79 billion), the companies added.

"This merger is a natural continuation of our strong collaboration to the benefit of consumers, our farmers and their milk price," Tuborgh said in the statement.

The new entity will be stronger and more resilient in the face of an anticipated decline in overall European milk volumes, through more diversified product portfolios and market positions, they said.

"Through Arla's global reach we can access consumers and customers beyond our current geographical reach as well as strengthening our business resilience," said DMK Group CEO Ingo Muller, who will become part of Arla's executive management.

The agreement is subject to votes by the boards of representatives of both companies, scheduled for June of this year, as well as regulatory approvals, which the companies said were expected towards the end of 2025.

($1 = 0.9141 euros)

(Reporting by Louise Breusch Rasmussen, editing by Terje Solsvik and Louise Heavens)