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FrieslandCampina and PT Ultrajaya Milk Industry have agreed a strategic partnership that will see Frisian Flag Indonesia (FFI) become part of the Ultrajaya Group, creating a broader platform for dairy and ready-to-drink beverages in Indonesia.

Royal FrieslandCampina said the partnership is intended to strengthen the companies’ long-term position in Indonesia and expand access to dairy nutrition for consumers across the country.

Under the proposed transaction, FrieslandCampina will acquire a controlling interest in Ultrajaya, although that interest will only take effect once the transaction is completed. FrieslandCampina’s Members’ Council, representing the cooperative’s member dairy farmers, has approved the transaction.

Completion remains subject to customary conditions, including approval by Ultrajaya shareholders and the relevant Indonesian authorities.

As part of the agreement, Frisian Flag Indonesia will become part of the Ultrajaya Group. The two businesses will continue to operate as separate companies, retaining their existing brands, portfolios and organisations.

The companies said cooperation will be intensified, with a focus on long-term value creation and combining their respective capabilities in the Indonesian dairy and beverage markets.

Ultrajaya will remain an Indonesian listed company, with its headquarters, leadership and day-to-day operations continuing to be based in Bandung.

Sabana Prawirawidjaja, co-founder of Ultrajaya, will remain President Director, while the Prawirawidjaja family will continue as substantial long-term shareholders in the company.

The transaction therefore combines FrieslandCampina’s international dairy expertise with Ultrajaya’s established Indonesian presence and ready-to-drink beverage capabilities.

FFI, which has operated in Indonesia for more than 100 years, is one of the country’s established dairy businesses and is widely recognised for its Frisian Flag brand.

According to FrieslandCampina, the partnership is designed to retain strong Indonesian leadership and decision-making while bringing together FFI’s dairy expertise and investment capabilities with Ultrajaya’s local capabilities and market platform.

Both companies said they share a long-term commitment to Indonesian consumers and the development of high-quality nutritional dairy products.

For FrieslandCampina, the transaction also supports its stated mission of increasing access to dairy nutrition for children and families in Asia.

Under Indonesian regulations, once FrieslandCampina obtains a controlling interest in Ultrajaya, it will be required to make a mandatory tender offer in cash to Ultrajaya’s minority shareholders.

Further details of the tender offer will be disclosed through the Indonesia Stock Exchange.

The transaction remains subject to the required approvals before completion.