The Dutch dairy group FrieslandCampina calls reports about an impending merger with the Scandinavian Arla 'speculative,' and Arla even says '100 percent inaccurate.' In recent days, trade media in various European countries have reported possible merger talks.
According to the Danish Landbrugs Avisen, Royal FrieslandCampina is under pressure due to plans in the Netherlands to curb the dairy industry because of high nitrogen emissions. Scandinavian dairy circles also refer to an earlier Rabobank study which predicts that FrieslandCampina will be overtaken by Arla in the international revenue ranking next year.
Last year, FrieslandCampina was still slightly larger than Arla. But the expectation is that Arla’s revenue will continue to grow, which is not the case for FrieslandCampina. A merger would create the largest dairy company in the world with a total revenue of more than 22 billion euros. This would make it larger than the French Lactalis, which has revenues of 21.1 billion euros.
The European Commission would probably only approve any such merger under certain conditions, just like it did with the merger of Friesland and Campina. In 2003 and 2005, Arla first tried to merge with the then Campina, but the boards of both companies could not reach an agreement. Instead, Campina chose to merge with Royal Friesland Foods in 2008.