The financial details of the deal, which includes a production site in Bahrain with capacity to produce 66,000 tonnes of processed cheese per year, were not disclosed.

Mondelez, the world's No. 2 confectioner, with brands such as Oreo and Cadbury, separated in 2012 from Kraft Foods, a precursor to Kraft Heinz.

The sale comes as Mondelez's licence to sell products in the region under the Kraft brand expires in 2020.

Arla, which is owned by 11,200 farmers in Denmark and northern Europe, said that with the deal it aims to grow sales in the Middle East and North Africa to more than 1 billion euros (901 million pounds) by 2025 from around 560 million euros this year.

The deal is expected to close by the end of May next year, Arla said.

(Reporting by Jacob Gronholt-Pedersen; Editing by Kirsten Donovan)

By Jacob Gronholt-Pedersen