FrieslandCampina agrees to divest Russian dairy subsidiary to Ehrmann

FrieslandCampina has signed an agreement to sell its Russian subsidiary Campina to German dairy company Ehrmann.

The financial details of the deal have not been disclosed by either company.

FrieslandCampina Food and Beverage president Roel van Neerbos said: “This divesture is part of FrieslandCampina’s previously announced strategy to review its position in various markets.

“Under Ehrmann’s umbrella, our Russian consumer dairy business will be able to further develop and realise its full growth potential.”

Ehrmann and FrieslandCampina have a strong presence in different segments of the Russian dairy market.

The deal is expected to bolster Ehrmann’s position in Russia while allowing FrieslandCampina to focus on consumer markets elsewhere.

Completion of the transaction is subject to the approval of the Federal Antimonopoly Service of the Russian Federation, as well as authorities in Kazakhstan, Uzbekistan and Belarus.

The deal is expected to close next month.

Upon completion of the deal, Ehrmann will acquire Campina along with its 650 employees as well as assets and contractual obligations.

The German firm plans to manage dairy production in Stupino, Moscow, and will focus on developing established brands such as Fruttis and Nezhny.

Ehrmann CEO Christian Ehrmann said: “This acquisition reflects Ehrmann’s strategy of growing its market share in Russia with locally produced, strong brands.”

In a separate development in the Canadian dairy sector, Saputo has announced two strategic acquisitions in the dairy alternatives and value-added ingredients segments for approximately $155m (C$187m).

Saputo acquired Bute Island Foods, which is engaged in the production of vegan cheese for the retail and foodservice industries.

The second deal involves Saputo agreeing to acquire the Reedsburg facility of Wisconsin Specialty Protein.

The facility manufactures value-added ingredients such as goat whey, organic lactose and other dairy powders.