The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Swedish dairy products and fruit juices company Skanemejerier by French dairy giant Lactalis. The Commission examined the competitive effects of the proposed acquisition in the markets for dairy products, notably the supply of cream and the procurement of raw milk in Sweden.

The Commission’s investigation showed that the proposed transaction would not significantly alter the market structure in relation to dairy products and that the merged entity would face competitive pressure from a number of credible competitors. It also showed that the proposed transaction was unlikely to lead to a lessening of competition in relation to the procurement of raw milk, since farmers will be able to sell raw milk to third parties to the same extent as before the transaction.

Lactalis is active internationally in the dairy sector. Its core business is the production and marketing of drinking milk, butter, cheeses, fresh dairy, cream and industrial dairy products.

Skanemejerier is active in the dairy sector and especially in the markets for the production and marketing of drinking milk, fresh dairy products, cheeses, cream, butter and juice.

The acquisition of Skanemejerier, which has annual sales of Eur330 million, strengthens the international presence of Lactalis.

The board of Swedish dairy co-operative Skanemejerier has agreed to pursue sale talks with Lactalis. Approval was required to change Skanemejerier’s co-operative status. The acquisition of Skanemejerier, which has annual sales of Eur330 million, will strengthen the international presence of Lactalis.

The French family-owned dairy company acquired Parmalat of Italy last year to increase its sales to almost Eur15 billion. Lactalis and Skanemejerier expect to a finalise a deal by the end of February.

French dairy group Lactalis is reported to be in negotiations to acquire Skanemejerier, the Swedish dairy products and fruit juices co-operative. Skanemejerier achieved a net profit of SEK300.2 million ($44.6 million) in 2010, up substantially from SEK26.9 million reported in the previous year. However, the increase was due to the proceeds from the disposal of a majority stake in juice business ProViva to Danone. At the operating level, Skanemejerier reported a loss of SEK52.1 million on sales up 10.8% to SEK3.31 billion.

Danone has signed exclusive 10 years licence agreements with Probi, providing the French food and beverage giant with exclusive rights to use the Swedish probiotic research company’s Lp299 technology in probiotic fruit drinks and fruit juices for gut health outside North America. Danone is also acquiring a 51% stake in the ProViva probiotic digestive health brand from Swedish dairy company Skanemejerier.

ProViva was the world’s first probiotic fruit drink for digestive health and remains the brand leader. Danone’s Activia yogurt is the biggest digestive health yogurt brand in the world.

“Danone is one of the most successful healthy food companies in the world and is better placed than anyone else to replicate the success of ProViva in Sweden in other parts of the world,” says Micheal Oredsson, chief executive of Probi.

Danone’s current interest in developing probiotic fruit drinks and fruit juices follows its recent global joint venture with global fruit producer Chiquita.