Swedish-Danish Arla Food will not complete a bid for all shares of the Egyptian stock-listed Arab Dairy Product Company (ADPC) after a thorough investigation into the company, the firm announced Wednesday.
“Our conclusion, based on the due diligence, is that we shall not place a final tender offer for Arab Dairy,” said Finn Hansen, Executive Vice President for Arla’s international business group in a statement.
However, Arla Food said that they are exploring alternative options to enter the Egyptian market “as Egypt is still an interesting market for us”.
Arla Foods has announced its non-binding bid for Arab Diary in September.
Denmark-based Arla Foods is the largest producer of dairy products in Scandinavia, and is deemed the seventh largest dairy firm the world. The company describes itself as being owned by 13,500 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxemburg and the Netherlands.
Arab Dairy started production in 1990 in Egypt, and currently exports to Middle Eastern countries including Lebanon, Jordan, Libya, the UAE, Saudi Arabia, Palestine, Bahrain, Oman and Kuwait.
Egypt dairy product exports amounts to approximately $25m each year, out of $179m in juice and beverages exports, according to the Food Export Council.