Burges Salmon advises Milk Link on market-changing merger
23 May 2012
A specialist team from Burges Salmon has advised longstanding client Milk Link on its proposed merger with Arla Foods amba, creating one of the first ever mergers between a UK and a foreign co-operative.
The proposal, announced on 22 May, will result in the full merger of Milk Link - the nation’s leading dairy farmer co-operative - with Arla Foods amba, one of the largest and most successful European dairy co-operatives, headquartered in Denmark.
The merger brings together two successful and growth orientated farmer-owned dairy processing businesses with well-established operations in the UK. It is Arla’s ambition to invest in and grow the UK dairy industry, including the construction of one of the world's largest fresh milk processing facilities in Aylesbury – designed to have zero carbon credentials.
The Burges Salmon team, led by senior partner Alan Barr and corporate partner Camilla Usher-Clark, has worked very closely with Milk Link during the complex merger process – fielding specialists from across its co-operative, food & farming, competition, pensions and employment practice areas.
The firm has also drawn on the international expertise of one of its global preferred firms, Gorrissen Federspiel, to advise on aspects of the merger which was effected under Danish law. A strong relationship with the Danish firm enabled Burges Salmon to work with partner Michael Meyer and associate Christoffer Fode and draw on their experience of Danish co-operative law to assist Milk Link during the merger process.
Arla Foods amba was advised by Danish firm Kromann Reumert (lead by partners Poul Viggo Petersen and Arne Møllin Ottosen) and Allen & Overy LLP (lead by partner Alun Eynon-Evans).
The proposal is still subject to Milk Link member approval in June and competition clearance, as well as a number of other conditions.
Milk Link’s chief executive Neil Kennedy says the proposed merger will contribute to the long-term growth of a vibrant British dairy industry: “Milk Link Members will have a stake in one of Europe’s largest and most successful dairy businesses, plus our farmers will benefit from Arla Foods amba’s long-term strategic vision, global scale, broad product and customer base and proven track record.
“We believe the agreement reflects and reinforces Milk Link’s current position as one of the UK’s leading dairy businesses.”
Burges Salmon corporate partner Camilla Usher-Clark said: “It is very satisfying to have reached this stage in what is naturally a very challenging process involving a number of complex legal and commercial issues. In particular, we are pleased to have been able to field a bespoke team in order to meet all the varied requirements of our client, including facilitating international expertise as required."
The wider Burges Salmon team included corporate finance associates AJ Venter and Tim Roberts, the firm’s head of competition Laura Claydon assisted by associate Marc Shrimpling, the firm’s head of food & farming William Neville, employment partner Roger Bull and newly promoted pensions partner Michael Hayles.
Burges Salmon has worked with Milk Link since its creation in 2000 following the break-up of the Milk Marketing Board and has seen it grow into the UK’s most progressive integrated dairy business. Entirely owned by British dairy farmers, Milk Link employs around 1,200 people at eight processing facilities and in 2010/11 generated a turnover of £586m.
“We are delighted to have been able to play a part in assisting Milk Link reach this major step in its evolution which recognises and rewards the loyalty of its members. It has been a privilege to have worked with the Milk Link team to fulfil a 12 year strategy which will make its farmers full members of the world's fourth largest farmer-owned dairy co-operative,” adds Camilla Usher-Clark.
Peter Lauritzen, chief executive of Arla Foods UK plc said: “Together with Milk Link we will be able to offer British retail and foodservice customers with a full range of high quality dairy products from a single, secure source, making us an even more attractive partner for British retailers.”
Burges Salmon has significant strength and depth of experience in both specialist co-operative law and in the food & farming sector, making them a natural partner for Milk Link. On corporate work, Chambers describes it as a firm that “punches well above its weight” with the food & farming team described as “utterly driven, intelligent and reliable."