Lurpak maker Arla Foods is plotting a merger with German co-operative Hansa-Milch.

Talks between Hansa-Milch and the Scandinavian group are already underway, with a decision on the merger expected by March next year. Arla said the move was part of an ongoing bid to expand its presence in Germany.

Hansa-Milch is owned by around 1,000 cooperative members, of whom 670 are active milk farmers.

“Together with Hansa-Milch, we would be able to offer a complete portfolio of dairy products from one single supplier, which will enable us to become an even more attractive partner to the German retail trade,” said Arla chief executive Peder Tuborgh.

Arla chairman Ove Møberg added: “Once we got to know Hansa-Milch it became clear that we are not only comparable as cooperatives, we also share the same ambitions. Together we will be stronger and we will be able to offer consumers a broader range of products.”

Any deal would be subject to approval from European competition authorities.

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