UPDATE 1-Louis Dreyfus, Russia's Sistema to form agri JV

* JV to receive grain, oilseed farms with total 87,500 ha

* JV to eye acquisitions in S. Russia, Central Chernozem

MOSCOW, April 4 (Reuters) - Russia’s Sistema said it had agreed to establish an agricultural joint venture with members of the Louis Dreyfus family as the oil-to-telecoms conglomerate seeks to diversify further.

Louis Dreyfus is one of the world’s four dominant agribusiness companies along with Archer Daniels Midland , Bunge and Cargill - a group also known as the “ABCD”.

Sistema and RZ Agro Ltd, which is affiliated with the Sierentz Group, both controlled by Louis Dreyfus family, will set up a new company to be named RZ Agro Holding Ltd, Sistema said on Wednesday.

“We are firm believers in the success of RZ Agro Holding as the grains sector in Russia has tremendous potential due to its low production costs and geographical position,” Gérard Louis-Dreyfus and Peter Mann, representatives of shareholders of RZ Agro Ltd, said in a statement.

Sistema, which also owns businesses in information technology, retail, healthcare and banking, has said it wants to develop a third core asset in addition to its two main sources of revenue - oil firm Bashneft and top Russian mobile phone operator MTS.

Sistema Chief Executive Mikhail Shamolin told Reuters last April that along with the agricultural sector, the firm was considering going into chemicals and fertilizer businesses.

Sistema will provide to the JV two grain and oilseed farms in the Rostov Region of Russia, with a total area of 46,000 hectares, it said.

Dreyfus affiliate RZ Agro will contribute three grain and oilseed farms in the Rostov Region with a total area of 41,500 hectares and management unit Russkaya Zemlya LLC.

“Our ability to consolidate prime agricultural land into regional clusters and achieve cost-effective production ... will be significantly enhanced with the creation of this joint venture”, said Stéphane Mac Farlane, chief executive officer of Russkaya Zemlya.

The JV will expand its agricultural assets through organic growth and strategic acquisitions to create a leading agricultural company in Russia, Shamolin said in the statement.

“The joint venture will analyse acquisition opportunities in the key production regions of Southern Russia and Central Chernozem with a view to creating efficient clusters with access to domestic and export markets,” he added.

The transaction is expected to occur in the second quarter of 2012 and is subject to certain conditions, including execution of additional agreements and receipt of approval from the Russian Federal Antimonopoly Service.

Upon completion of the JV, expected in 2013, Sistema will own 50 percent, with possible adjustments to the valuation of the transaction based on performance measures.

Sistema’s global depositary receipts (GDR) were down 2.86 percent in London on Wednesday.