Swedish-Danish cooperative Arla Foods has agreed to sell its packaging subsidiary Danapak Flexibles to Austian-based Schur Flexibles Group.

The transaction, which is expected to be completed in July 2014, is subject to approval by the relevant competition authorities.

Arla Foods vice-CEO Povl Krogsgaard said the company's subsidiaries which do not have a direct link to dairy production have been divested over the past several years so as to concentrate on core business.

"Since it is not within Arla's core business to produce packaging, we are no longer the right owner of Danapak, who will be better suited under new ownership that can take the company to the next level in its future development," Krogsgaard added.

Denmark-based supplier Danapak Flexibles provides packaging services for the firms in the pharma, dairy and food industries.

Image: Arla will sell its packaging subsidiary Danapak. Photo: Courtesy of Arla Foods.