Arla Foods amba has made a firm offer to purchase the southern German dairy company, Allgäuland-Käsereien.

The offer to buy Allgäuland-Käsereien could result in Arla increasing its presence on the German market via the southern German dairy.

Arla’s offer will now be presented to the Allgäuland milk producers. In a letter to the dairy farmers, the chairman of the board of Allgäuland-Käsereiens writes: “We are very pleased to receive Arla’s offer because the planned acquisition is not only an important but also a necessary step towards ensuring the future of our company.  In Arla Foods we are also getting a strong partner,” says chairman Kuno Rumpel.

The next step in the process is that Allgäuland-Käsereien will hold a general meeting at which its milk producers will make a decision regarding the purchase offer. If they decide to accept the offer, the acquisition will be subject to approval by the EU competition authorities before the deal can be complete.

Arla: Important potential in cheese
Against a background of a financially difficult situation within the southern German cooperative company, Arla Foods and Allgäuland-Käsereien have been engaged in discussions and negotiations for some months now.

“We have issued a specific offer to purchase, which ensures that we can continue the activities in Allgäuland on a rational financial basis,” explains Tim Ørting Jørgensen, group director of Arla Foods International with responsibility for Arla's German market.

“We see important potential in Allgäuland-Käsereien’s cheese production. They produce excellent speciality cheeses for which there is important international potential and it is for this reason that the dairy is of interest to Arla Foods. Some of their products will supplement the cheeses Arla already makes, among them the cheeses marketed under the House of Castello® quality brand. We see great potential in Allgäuland’s products and not only in Germany. Due to our strong international setup we will be able to complement our existing portfolio and offer these products to consumers and customers in international markets,” says Tim Ørting Jørgensen.

Earlier this year, Arla Foods merged with the northern German dairy, Hansa-Milch, which produces only fresh dairy products. Arla’s aim is to become one of the largest dairies in Germany and the Arla’s strategy also focuses on growth within cheese, including the global House of Castello® brand.

Facts about Allgäuland-Käsereien

• 1,800 milk producers
• 4 production facilities
• 306 employees
• 452 million kg of milk
• Primarily produces cheese and butter, but also some fresh dairy products
• Annual turnover: EUR 253 million (of which 31 % is from exports)
• Read more here: www.allgaeuland.de