The Danish-Swedish dairy group Arla Foods announced that it had entered into an agreement to merge with the Dutch dairy group Campina.

The merger will create Campina Arla, the world's largest farmer-owned dairy company, with some 28,000 employees and a combined turnover of approximately 10 billion euros ($13 billion). The new company will have its main office in Copenhagen, Denmark.

"Campina Arla will consolidate the two companies' strong positions in Europe through driving innovation and will create a joint position in dairy markets of the Middle East as well as Asia. In addition, it will further expand its strong position as an innovative supplier of ingredients for food and pharmaceutical industries throughout the world," Arla Foods said.