The Board of Directors of the dairy groups, Arla and MD Foods, have decided to recommend to the two companies' statutory assemblies that they enter into a new company under the name of Arla Foods with effect from April 17, 2000.
The new company will be owned by the two present companies until the three companies can be joined into one company.
The Supervisory Boards also propose that the new company has its headquarters in Aarhus and divisional head offices in Stockholm, Copenhagen and Leeds.
Moreover, it is agreed that the chairman of the new company will be the current chairman of Arla, Lars Lamberg with the present chairman of MD Foods, Knud Erik Jensen as deputy chairman. Managing Director will be Managing director of MD Foods Jens Bigum with managing director of Arla, Åke Modig as Deputy Managing Director.
Lars Lamberg, ChairmanKnud Erik Jensen, Deputy Chairman
Jens Bigum, Managing DirectorÅke Modig, Deputy Managing Director
Participation in the increasing consolidation within the international retail trade as well as within the european dairy industry is the main reason behind the new company. Joint forces will enhance the ability to meet demands on product development, marketing, added value, capital investments as well as the skills necessary to meet international customer requirements.
The new company will represent the first cross-border merger between two farmer-owned companies creating a competitive, international dairy group - despite the relatively small sizes of Sweden and Denmark. Between them, the two companies will account for over 7 billion kg milk, i.e. 6 per cent of the milk produced within the EU.
DKK Turnover (m) 13,000 (estimate)24,900 (estimate) Milk volume
4,098 Milk volume in the UK
800 Number of farmers 8,4329,540 Number of staff 5,61213,702 of which abroad 1153,496
The Boards' recommendations will now be submitted to the owners with a view to the relevant bodies reaching a decision in December.
The new company is expected to be established by 17 April assuming approval by the competition council.