May 22, 2012 / 9:21 AM / 7 years ago

UPDATE 1-Arla says to grow with German, UK dairy mergers

* Targets UK’s Milk Link, Germany’s MUH

* Says will be biggest dairy in UK, 3rd in Germany

* Says combined group revenues 65 bln DKK (Adds details, quotes)

COPENHAGEN, May 22 (Reuters) - Nordic cooperative dairy group Arla Foods is planning major acquisitions in Britain and Germany that will boost its revenues by 9 billion Danish crowns ($1.55 billion) per year, the Denmark-based company said on Tuesday.

Arla Foods said it aimed to acquire Germany’s eighth largest dairy, the cooperative Milch-Union Hocheifel (MUH), and the UK’s fourth largest dairy, the cooperative Milk Link, to strengthen its position as one of Europe’s biggest dairy groups.

Arla did not give financial details, but said it expected the deals to take effect this year.

A spokesman said no money would change hands.

“Arla will be the UK’s largest dairy company and will rank third in Germany; these are both stipulated objectives for Arla by 2015,” the company said.

The three cooperatives had combined 2011 revenues of nearly 65 billion Danish crowns, and the acquisitions would boost Arla’s annual production to more than 12 billion kilogrammes of milk from about 9 billion kg today, the company said.

“Together, the companies are expected to generate revenues of 70 billion Danish crowns by 2013,” Arla Foods said.

The owner representatives in Arla Foods and MUH and the members of Milk Link will decide on whether to merge on June 26, and the mergers will require clearance from the regulatory authorities, Arla Foods said.

Arla, which is owned by 8,024 co-operative owners in Denmark, Sweden and Germany, said its ownership base would grow to 12,300 cooperative owners with the takeovers.

“The growth goes hand in hand with Arla’s Strategy 2015, the key objective of which is to improve returns for its owners by, among other things, enhancing their positions in the core markets of the UK and Germany,” Arla said.

It said the merged entities would continue to operate under well known brands as well as its own label. ($1=5.8205 Danish crowns) (Reporting by John Acher; Editing by Mike Nesbit)

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