Arla Foods amba - the Danish and Swedish dairy co-operative that owns 51% of the shares in Arla Foods UK - is trying to purchase the remaining 49%.

Its CEO, Peder Tuborgh, has claimed that the move "is a natural development from the merger in 2003 between Arla Foods plc and Express Dairies".

This masks deep disappointment with the performance of its UK subsidiary. In May, when Arla UK posted its financial results, Kim Nielsen, group executive director of Arla amba, said: "We are working with Arla UK's management to develop and implement plans to deliver long-term improved performance." But recently the relationship between Arla UK and its suppliers has been put under further strain and there has been mistrust over its milk pricing strategies.

However, milk purchasing director Peter Walker told The Grocer before the announcement: "The company has lots of good things on the horizon."