EC gives green light to Campina and Friesland for merger

New Dutch entity a global player

BRUSSELS – Giant Dutch dairy co-operatives Campina and Friesland have become an even greater global market player following their recent merger for which they received conditional approval from the European Commission. The conditional merger of the two firms, which together have 17,000 members, has now obtained final approval from the memberships.

The two entities first announced the plan to merge in December 2007, with a view to significantly strengthening their positions in both consumer products in Europe, Asia and Africa, and also in dairy ingredients on a worldwide basis.

EU competition approval has proved to be a long process. The approval is conditional on the sale of businesses in which it was felt the combined firms would have too dominant a position.

The businesses to be divested are Friesland Foods Fresh in Nijkerk, Campina Holland Cheese’s cheese production plant in Bleskensgraaf, and the Yogho Yogho and Choco Choco brands in The Netherlands and Belgium. The divesture represents about four percent of the total sales of the merged cooperatives.

Some 1.2 billion kg of milk must also be made available for sale each year to new and existing producers of fresh dairy and naturally matured cheese in The Netherlands, in order to reduce the group’s share of that market.

Reasons

The new company, called FrieslandCampina, will consist of four business groups: Cheese & Butter, Consumer Products Western Europe, Consumer Products International and Ingredients.

Cees ‘t Hart, who assumed the role of CEO of FrieslandCampina, says that the reasons for the merger are just as strong as they were a year ago. The new entity “can actually start doing business together based on our combined innovative strength and the milk expertise of our colleagues.” He expects FrieslandCampina to be able to grow more strongly in brands and new concepts. He expects this also to be the case for both consumer products and dairy ingredients.

Units

Both Friesland and Campina already had ingredients activities. These are now being brought together under the new businesses group, which is geared towards value-added.

In an open letter the cooperatives expect the consolidation to “be a gradual process, with no major changes in the short term”.