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Arla Foods Intends to Acquire and Grow

23 March 2009

EU - Arla Foods Amba and Royal FrieslandCampina N.V. intend to enter into an agreement about the sale and purchase of all the shares in Friesland Foods Fresh Nijkerk. The takeover includes dairy activities, buildings, land, equipment and brands Breaker, Milk&Fruit and Melkunie.

For the brand Friesche Vlag there is a license agreement for a period of 10 years for fresh dairy products in the Netherlands only. It is expected the transaction will be completed in the course of this year’s second quarter. The supply of raw milk to the factory in Nijkerk is guaranteed by FrieslandCampina until 1 January 2017. Completion of the sale and purchase is among other things conditional of approval of the competition authorities of the European Commission.

Friesland Foods Fresh in Nijkerk produces milk, buttermilk, natural and fruit-flavoured yoghurt, quark yoghurt, custard, porridge, Milk&Fruit and Breaker. In Nijkerk, fresh dairy products are produced under the brand Friesche Vlag and other own brands for supermarkets. Just over 500 people work at the Nijkerk site, including approximately 150 temporary staff. Revenue is approximately 215 million euros (2007).

Arla Foods say they will respect the current employment terms and conditions and the transaction is not meant to have any direct consequences for the employees.

The sale of Friesland Foods Fresh in Nijkerk is due to the European Commission’s decision that after the merger between Friesland Foods and Campina the new combination would hold a dominant position in the markets for fresh dairy and naturally matured cheese in the Netherlands, in long-life flavoured dairy drinks in the Netherlands and Belgium and in the raw milk market in the Netherlands.

"This is a very important step for Arla Foods, which makes the Netherlands a new core market for our company. We believe we have a lot to offer the Dutch consumers, and we appreciate the agreement we have reached with Royal FrieslandCampina, which enables us to enter a dairy market with such proud traditions," said Arla Foods’ CEO Peder Tuborgh. "It is in perfect alignment with our strategy to become the preferred dairy for consumers in Northern Europe. We will respect all the current employment terms and conditions and intends to continue the operations and employee base as it is today."

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