Arla Foods, based in Denmark, and German DMK Group announced their intention to merge their operations.

The combined entity will have 12,000 farmer members and around €19bn in annual revenues, making it the largest dairy co-op in Europe and one of the five largest dairy processors in the world.

The proposed merger will be subject to approval from the board of representatives in both co-ops and regulatory approval.

The new entity will continue under the Arla name, with Arla’s current chair and CEO remaining in their positions.

Arla is the larger of the two co-ops, with €13.8bn in revenue, and 13.7bn kilogrammes of milk volume.

DMK had most recent revenue of €5.1bn on 5.3bn kilogrammes of milk processed.

Danish HQ

The new co-op will be headquartered in Denmark and have operations across northern Europe and the UK.

Chair of Arla Foods Jan Toft Nørgaard said: "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."

DMK Group chair Heinz Korte said: “This partnership strengthens the resilience of our co-operatives and significantly contributes to strengthening the competitiveness of our farmers."