Arla has announced plans to merge with Belgium-based dairy co-op EGM Walhorn.
The 800 members of EGM Walhorn will join Arla Foods amba’s 12,600 farmers in July, provided representatives agree the merger at meetings on 13 and 14 May.
EGM Walhorn’s members, spread across Belgium, Germany and the Netherlands, will get an unlimited milk purchase guarantee and be paid on the same price basis as current Arla farmers, set by European and world markets.
Arla Foods chairman Åke Hantoft said the Walhorn production site would complement Arla’s sites at Pronsfeld in Germany and Nijkerk in the Netherlands.
The co-operative revealed an £83m investment in making products for global markets such as Russia, China and the Middle East, as part of its plan to double non-EU exports by 2017.
“We are confident that EGM Walhorn is the right business with which to deliver our plans,” Mr Hantoft said.
“EGM Walhorn would provide us with an opportunity to grow our milk pool across Europe and the merger would be an important step towards achieving our strategic ambitions, which are focused on growth.”
EGM Walhorn supervisory board chairman Mathieu Dobbelstein said the merger offered clear prospects of secure growth and greater profitability.
“In Arla, we would have a strong partner, strengthening our co-operative orientation and offering farmers a secure basis for future development.”
EGM Walhorn was founded in 1933 and is based near Eupen in Belgium.
Its dairy operations produce about 550m kg of milk a year that is processed and marketed by Walhorn AG, a joint venture with French company Lactalis Group.
In 2012, Arla merged with Bristol-based co-operative Milk Link to create the UK’s biggest dairy firm.
More than 2,800 British dairy farmers are now Arla members and in January the co-op said it was looking to sign up another 300m kg of milk in the UK.
Arla’s membership is still some way short of FrieslandCampina, which has more than 19,000 farmers in the Netherlands, Germany and Belgium.