DMK, Germany’s largest dairy group, has made a move to buy out its venture partner in Mlekoma Dairy, a sales and distribution business in Poland.
The co-op holds a 51% stake in Mlekoma Dairy, a venture it runs with Saudi group Saudia Dairy & Foodstuff Company, or Sadafco.
A spokesperson for DMK said the deal remains subject to competition approval in Poland.
DMK is looking to “promote our branded business in Poland”, the spokesperson added.
The company will focus its efforts on its growing its Milram brand in Poland’s foodservice and retail markets.
In 2018, publicly listed Sadafco acquired Polish dairy group Mlekoma, which already had a venture with DMK. After that transaction, Sadafco became a partner in the Mlekoma Dairy venture alongside the German co-op.
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By GlobalData
The deal set to go before Polish competition officials centres on the Mlekoma Dairy business, the DMK spokesperson said. Sadafco will retain ownership of Mlekoma’s dairy-processing factories in Poland.
Earlier this month, DMK announced plans to close a domestic facility and reduce capacity at three others amid declining milk production volumes.
The co-op’s site in Dargun in north-eastern Germany is to be shuttered, while facilities in Edewecht, Hohenwestedt and Everswinkel are to be scaled down.
Some 150 employees will be impacted by the measures, which are due to be implemented by spring 2025.
The co-op, which has around 7,000 employees, said it will enter into talks with the affected employees to discuss their options.
DMK generated a turnover of €5.5bn ($5.9bn) in 2023, which it described as “on par” with a year earlier.
The co-op’s earnings stood at €13.2m, versus €22.7m in 2022.
DMK pointed to “extreme market distortions” that led to “enormous devaluations of stocks, especially for cheese”.
