USA: Land O'Lakes: feeding on a shrinking market - COMMENT
Land O'Lakes will buy Purina Mills for $230 million. The dairy cooperative is trying to stay competitive in the shrinking US market for livestock and animal feed. But the future of the US livestock industry is not clear. Although the US has so far avoided the devastation of BSE ("mad cow") and foot and mouth, consumers are still showing concern, leading to a decrease in demand for red meat and red meat products. Dairy cooperative Land O'Lakes Inc. announced on Monday that it would buy third largest feed producer Purina Mills for approximately $230 million in cash to enhance its competitive position in the consolidating feed industry. Purina Mills will become part of Land O'Lakes Farmland Feed LLC following the acquisition. The company will add about $425 million in annual sales to Land O'Lakes' nearly $6 billion annual sales.
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