Prime Minister Viktor Orban's government said on Tuesday it had banned the foreign takeover of dairy company Alfoldi Tej Kft by a suitor, identified later by a government official as Hellenic Dairies.

Orban's cabinet, which has been stepping up its opposition to foreign takeovers of key companies, said a foreign takeover would mean raw milk would be exported from Hungary and dairy products produced abroad would have to be purchased at higher prices than before.

Hellenic Dairies told Reuters late on Thursday that it had planned to maintain and expand the Hungarian company's domestic activity, which Budapest says accounts for nearly a fifth of raw milk purchases in Hungary.

"Our main goals were to maintain and develop the company's domestic activity, enrich its portfolio with new products, maintain and develop milk producers and renew and expand the facilities with significant investments in buildings and equipment," the company said in an emailed response.

There was no indication of the price from either side.

Hellenic Dairies said its offer to acquire Alfoldi Tej Kft was accepted by the company's shareholders before the transaction fell through amid a foreign direct investment screening procedure.

"We should note that in the approval file there was a detailed business plan that described our plans for the next day," the company added without giving more details on the reason for the rejection.

Hellenic Dairies has expanded in Romania, Bulgaria and Cyprus through buyouts in recent years. Alfoldi Tej Kft employs more than 700 people and processes nearly 270 million litres of milk per year, based on information published on its website.

It has been loss-making since 2021, company records show.