Prepared Foods April 26, 2005 enewsletter

Danish-Swedish dairy group Arla Foods and Dutch group Campina announced they were canceling plans to merge.

The planned merger would have formed one of the largest dairy groups in the world.

"The boards of directors of Arla Foods and Campina have concluded that it has not been possible to present at this time a joint merger proposal," a news release from Arla said.

Campina issued a similarly worded statement.

"We have enormous respect for Campina and regret that we could not reach a satisfactory result this time around," Arla Foods' chairman Knud Erik Jensen said. Talks could perhaps resume in the future, he noted.

Arla Foods chief executive Ake Modig also announced he would step down as soon as a successor was named.

"We regret his departure. We respect Modig's constructive contributions to our merger talks," Campina chief executive Justinus Sanders said in a statement.

The envisaged merger announced last December would have employed 28,000 people and had an estimated turnover of some 10 billion euros ($13.4 billion).

Arla Foods said it would focus on a corporate plan to be unveiled in June that would target the Nordic countries and Britain, as well as trimming costs.