Arla Foods UK and Arla Foods amba have jointly announced that they are in discussions which may lead to a cash offer for the 49 per cent share capital not currently owned by Arla Foods amba.
"We are now in talks with our British subsidiary about a possible bid for the remainder of the shares. We will make further announcements in due course" said Peder Tuborgh, chief executive of Arla Foods amba.
Arla Foods Amba currently owns a 51 per cent majority share in the British company and is seeking to obtain greater control of its supply chain. This will allow the company to make better investments as it expands within the market, Astrid Neilson, director of group communications at Arla Amba, told Food and Drink Europe.
Peder Turborgh, chief executive of Arla Foods Amba, said that no more information was available whilst the deal was still in the negotiation process.
"All I can say is that or approach is a natural development from the merger in 2003 between Arla Foods plc and Express Dairies" he said.
The Arla Foods group is Europe's second largest dairy company. Arla Foods was first formed in the spring of 2000 following a merger between the Danish MD Foods and the Swedish Arla. The company is owned by approximately 10,600 milk producers in Denmark and Sweden.
Following the merger with Dairy Crest in 2003 the UK has become Arla's largest market accounting for 33 per cent of total turnover. Sweden and Denmark account for 22 per cent and 19 per cent respectively while the other European markets account for 13 per cent.