Arla and MD Foods: The Merger Decision (A)

The managing director of MD Foods of Denmark and the president of Arla of Sweden, both cooperatives, were contemplating whether their companies should merge to create Europe's largest dairy company. Arla and MD Foods wished to continue the success of their joint ventures in a much closer relationship, but wondered if their owners (the milk-producing farmers in each country) would approve the merger. In addition, the two companies were different in size, organizational structure, organizational culture, monetary currency used and language spoken. Finally, a cross-border merger of two cooperatives was unprecedented throughout the world. The supplement Arla and MD Food: The Merger Decision (B), product 9B05M013 describes the merger decision.