Arla Foods and the German-based DMK Group have today (Tuesday, April 8) announced a proposed merger aiming to create "the strongest dairy cooperative in Europe".

The move would bring together more than 12,000 farmers and would aim to achieve a combined revenue of €19 billion.

The merger is subject to approval from the boards in the respective co-ops, as well as regulatory approval.

Over the coming months, detailed merger proposals will be discussed with co-op members and employee representatives.

Following this, the merger agreement will be submitted for approval to the co-op boards in mid-June.

If approved, the newly merged entity will carry the Arla name, and its headquarters will be based in Denmark.

Jan Toft Norgaard, the current chairperson of Arla Foods, will be chair of the new entity, Peder Tuborgh will be chief executive, and Ingo Muller will step into the Arla executive management team focused on post-merger integration.

Arla Foods, which is based in Denmark, has reported revenue of €13.8 billion and a milk volume of 13.7 billion kilogrammes, while revenue at DMK Group, the largest dairy co-op in Germany, stood at €5.1 billion, with 5.3 billion kilogrammes in milk volume.

Arla Foods and DMK Group have cooperated on several projects in recent years, including the joint venture project ArNoCo, which processes whey from DMK's cheese production into whey protein concentrate and lactose for Arla's global ingredients business.

Toft Norgaard said that the "the foundation of this partnership is formed by our shared values", adding that the proposed merger is "a win-win for our cooperatives".

"The strength of both Arla and DMK Group lies in our shared commitment to quality and innovation, and I see DMK Group as the perfect partner in shaping a new and strengthened Arla, poised to lead in the dairy industry," he added.

Heinz Korte, chair of DMK Group, said that the partnership "strengthens the resilience of our cooperatives and significantly contributes to strengthening the competitiveness of our farmers".

"Together, we can expand our reach for our dairy products, thus improving our offering and jointly driving the further development of innovative products for the benefit of our members," he said.