Milko and Arla to merge in Sweden
The boards of Milko and Arla are proposing a merger of the two dairy cooperatives in Sweden. Milko’s financial situation is critical and Milko has contacted Arla with a view to investigating the possibility of a merger.
“At Milko, our finances have been imbalanced for some time and in recent years we have been forced to take several radical cost-cutting initiatives. However, sales development has continued to be very weak in 2011 and the Board has therefore decided to dramatically reduce the milk settlement price,” Milko spokesman Lars Reyier says. “The number of dairy cows in Sweden has fallen by almost 50% since 1985. As elected representatives we therefore have both a mandate and a responsibility to seek out modern and unselfish structural initiatives on the dairy market that can provide our members with the best possible market and settlement price for the milk they produce.”
The basic principle of the merger is that the Milko members will become cooperative members and owners of Arla Foods on an equal footing with existing Arla members. The Milko members will receive the Arla milk settlement price from day one after the merger has been completed and approved by Konkurrensverket (the Swedish Competition Authority).
“Arla has the strength and the structure required to develop the Milko company and to receive milk from the dairy farmers who will transfer to Arla as a result of the merger, regardless of the volume of milk they supply. A merger is in line with our ambition to inspire the Swedish people on food issues and to create conditions for continuing to produce milk in the region,” chairman of Arla Foods’ Board of Directors, Å,ke Hantoft says. The deal must also be approved by Konkurrensverket, the Swedish Competition Authority.
