Arla Foods moves to buy majority shares of Egyptian dairy manufacturer

Arla Foods has submitted a non-binding offer to acquire the majority shares in Egyptian dairy and manufacturer Arabian Food Industries Company, also known as Domty, with a price per share of 31.48 EGP (US$0.64).

The dairy giant notes that it has valued Domty at approximately 8,897 million EGP or US$183 million based on the exchange rate for 100% of the shares. The precise number of shares Arla seeks to acquire has yet to be shared.

The current owners of Domty, the El Damaty family, will likely continue to hold shares alongside Arla, with Mohamed El Damaty retaining his role as the CEO.

Targeting Middle East markets

Arla announces plans to delist the Domty from the Egyptian Stock Exchange. The offer is subject to due diligence, definitive documentation and approvals from corporate and regulatory bodies.

“The dairy market in Egypt is substantial. Domty is a leading player in that market and the company is well-aligned with our strategy in Egypt. We are now looking at the details before deciding whether to proceed with purchasing the business,” says Kim Villadsen, SVP for MENA in Arla Foods.

“Expanding into Egypt is a natural step in our journey to better serve all our MENA consumers, reinforcing our commitment to regional production and ensuring that we continue to deliver high-quality dairy products tailored to regional preferences.”

The Swedish-Danish dairy cooperative’s biggest commercial areas outside Europe are the Middle East and North Africa. The acquisition could help increase the company’s footprint in the region with Domty’s 4,000 employees and two production units in Egypt.

In other news, Arla expanded support for its farmer owners in collaboration with Aldi. The German retailer is investing over £30 million (US$39.17 million) in dairy farmers over the next three and a half years.

The investment will enable Aldi to support Arla’s FarmAhead Customer Partnership, a new initiative aimed at helping farmers’ ongoing efforts to reduce on-farm emissions.

The retailer will partner in farming projects and innovations through this program to accelerate more sustainable farming practices and decarbonize dairy.