FrieslandCampina may be operational by end 2008

The merger was first aired in December 2007, with the companies saying it would significantly strengthen their positions in both consumer products in Europe, Asia and Africa, and in ingredients on a worldwide basis.

The vote, which took place on Wednesday and resulting in a two-thirds majority in favour of the merger, enabled the signature of the merger agreement by Friesland and Campina's respective management and cooperative boards.

This paves the way for selected teams to start working on the full merger of the two companies (pending approval from the European Commission) and preparing for the launch of a new multinational, to be known as FrieslandCampina.

The Commission is expected to make its pronouncement in the last quarter of 2008.

"If everything goes to plan, Friesland Campina can become fully operational by the end of the year," said Kees Gielen, acting CEO of Campina.

He added, however, that it will be business as usual until then.

"Friesland Foods and Campina will continue to function as two wholly separate, autonomous companies.

As soon as we get a decision from the European Commission, we'll be energetically starting out as a new, single company."

Both Campina and Friesland Foods currently have ingredients divisions.

It is planned that FrieslandCampina would comprise four divisions: Consumer Products Western Europe, Consumer Products International, Cheese & Butter, and Ingredients.

The projected annual turnover, based on 2007 figures, is €9.1bn.

Between them, the joint forces of 17,000 farmers would supply some 8.3bn kilos of milk.

The merger is also dependent on an advice by the works councils of the two companies.

Dairy fluctuations The dairy market is presently facing a number of issues that are affecting market conditions.

These include re-regulation markets by the EU and the World Trade Organisation, and a global market for dairy products that can fluctuate wildly.

The companies say that competition has been hotting-up in the dairy market, both on the regional and the global scene.

Moreover, demand for dairy products is increasing in emerging markets, such as India and China, which is having an affect on global consumption volumes.

"Dairy farmers are increasingly dependent on global developments in the dairy industry," said Kees Wantenaar, chairman of the board of Campina and chairman-designate of Friesland Campina.

"In a dynamic and competitive dairy market, they need a strong dairy cooperative.

FrieslandCampina will fulfil that role, with its broad product range, its presence in many regions and its capacity to be distinctive and achieve further growth."