Amsterdam, April 10 - Dutch dairy companies Royal Friesland Foods and Campina BV Thursday said they aim to merge and form a company capable of competing with global players such as Groupe Danone and Nestle SA.
The new company, to be named FrieslandCampina, will have yearly revenues of more than EUR9 billion.
"Together we want to take up the battle with the likes of Nestle and Danone," Theo Spierings, interim-president of FrieslandFoods told a news conference Thursday.
"FrieslandCompany will be able to introduce products on a global scale, and become a strong player. Our goal is to grow our business", Spierings said.
He described the marriage as "a proactive strategic move" in a turbulent global dairy market, referring to last year's takeover of Dutch Numico by French Danone.
"We see further consolidation in the European sector and we want to be well-positioned," Spierings explained.
His counterpart at Campina Kees Gielen said: "We want to grow our health & wellness-products in Europe and introduce them in Asia. We want to grow our cheese brand Milner internationally. In our consumer products business we will also look for growth through joint ventures and acquisitions".
The two companies initially announced their intentions the join in December. Their merger agreement was unveiled Thursday.
Talks with the European Union's executive Commission on obtaining merger clearance have already started.
"The discussions are constructive", said Spierings. Still, he said it is "far too early to make any statements" about whether the companies expect to get the green light from the EU regulator.
FrieslandFoods and Campina will spend coming months informing their members, the farmers producing the milk, about their plans, who will vote on the merger early May.
Sybren Attema, cooperation president of Friesland Foods said he's "very confident" members will support the merger.
His counterpart at Campina, Kees Wantenaar, said representatives of the members have already expressed support for the planned merger.
Consultancy firm McKinsey is advising the companies.