Much larger than Lactalis. The conversations have not yet been confirmed by either company, but Dutch trade publication foodbusiness.nl claims to have learned about them from credible sources. According to reports, Sybren Attema, chairman of FrieslandCampina, has been speaking with Jan Toft Nrgaard, a colleague from Arla, for weeks.
The scale of the two dairy cooperatives, both of which operate in the Benelux, is comparable: The annual revenue of Dutch FrieslandCampina is 11.5 billion and Danish Arla is 11.2 billion. Together, they would outperform Lactalis, the current leader in the dairy industry, with a combined turnover of 22.7 billion.
In terms of milk supply, climatic needs, and financial performance, the dairy industry confronts significant obstacles. Both businesses may benefit from economies of scale in terms of their competitiveness on global marketplaces.
The consent of all cooperatives, the dairy farmers who provide the milk, as well as the European Competition Authority must be obtained before a potential merger can proceed. The two businesses previously engaged in merger discussions in 2005, but they ended in failure.
