Australian firm Freedom Nutritional Products and A2, the New Zealand company named after the milk, said the deal was a “merger of equals”.
The new entity would be listed on the Australian stock exchange only.
Freedom is the bigger company and has exclusively distributed A2’s A2 milk in Australia, Japan and the UK.
A2 milk is marketed on the fact that it contains higher concentrations of A2 beta-caseins, which have been linked to boosted immunity.
Of the six major protein types in cow's milk, four are casein proteins and two are whey proteins. The caseins usually make up about 80 per cent of the protein in cow's milk. Normally milk produced in Australia and New Zealand is a mix of A1 and A2 milks.
A2 marketing suggests A1 milk is more likely to put children at risk of developing type-1 diabetes. But the milk has struggled to gain traction and remains a highly niche product with an estimated 0.6 percent of the Australian market even though its sales more than doubled last year.
In addition, University of Sydney nutritionist professor Stewart Truswell conducted a review of A1/A2 science and said there was, "no convincing evidence or probable evidence that the A1 casein in cow's milk is a factor causing heart disease ... (or) childhood diabetes".
Dairy Australia nutritionist Malcolm Riley said A2 Australia relied on the argument that regular A1 milk may cause harm.
"We don't accept there's any good evidence to show there's any benefit of A2 over A1," said Dairy Australia nutritionist, Dr Malcom Riley in press reports.