Arla Foods is making a non-binding bid for a majority stake in Arab Dairy Products Company, a listed company based in Cairo, Egypt.
The bid of 65 Egyptian pounds per share is dependent on a satisfactory due diligence of the dairy company and an approval from Arla'a board.
Arab Dairy believes that the acquisition will boost the company and place it among the top five or six biggest players in the Egyptian dairy sector as well as give it a market share of 13%-15% in the cheese categories.
Arla Middle East & Africa senior vice president Rasmus Malmbak Kjeldsen said: "Arab Dairy's local production is based on recombining, where water is added to milk powder and then processed into cheese.
"Approx. 80 per cent of this milk powder is imported to Egypt. Consequently, there is considerable potential for using milk supplied by owners in value-added products which we can sell in a growing market."
Arab Dairy has a strong position in both the retail sector and food service. It has eight distribution centers and 125 distribution vehicles operating nationwide.
