The combined business, to be branded Arla Milk Link, will process more than three billion litres of milk a year and have a combined turnover in excess of £2 billion. Milk Link is owned by its 1,600 dairy farmer members, and chief executive Neil Kennedy said the tie-up would create a platform for the long-term growth of the British dairy industry.
The co-operative, Britain’s largest cheese maker, saw sales of £628 million last year and employs some 1,200 staff. It is investing £20m in its Lockerbie Creamery to transform it into one of the country’s top cheddar production facilities.
Arla is owned by Danish, German and Swedish dairy farmers and purchases 90 per cent of its milk in the UK through a long-term contract with 1,300 farmers in the Arla Foods Milk Partnership.
The business, which produces the Anchor, Cravendale and Lurpak brands, employs 2,700 people in the UK and makes 2,500 deliveries a day to supermarkets across the country.
Peter Lauritzen, chief executive of Arla Foods UK, said the merger “will be good for our farmers, our customers and their consumers and, ultimately, the British dairy industry”.
The proposed tie-up is subject to approval from regulatory authorities and Milk Link members, who vote on the deal on 26 June.