ZURICH (Dow Jones)--Competition in the global market for nutritional dairy-based drinks will likely increase after Switzerland's largest dairy company Emmi AG announced Tuesday it seeks to raise as much as CHF100 million in an initial public offering.

Emmi, whose brands include Aktifit, Benecol and Caffe Latte, plans to issue 1,000,000 new shares priced between CHF90 and CHF100 a share, plus a greenshoe option of 85,000 shares. A greenshoe option allows the underwriter of the offering to sell additional shares if there is significant demand.

Proceeds of the IPO will be used to expand exports to Germany, Austria, Italy, Canada and the U.S. The company wants to increase annual exports by 10% on average over the next few years. The company has said it will strive for overall growth of about 4% in 2004.

The shares will begin trading on the SWX Swiss Exchange Dec. 6, and the company could be worth as much as CHF429 million if the IPO is sold at the upper end of the price range.

Emmi, whose Benecol brand of cholesterol-lowering drink has been expanding sales in Europe, competes against Unilever PLC's (UN) Pro.activ brand, as well as French dairy giant Group Danone's (DA) Actimel. Danone has a 60% share of the $1 billion probiotic market in Europe, in 2004, according to New Nutrition Business, a London-based food consultancy.

Public shares of Emmi will be offered to investors in Switzerland, while shares will be available through a private placement for other European investors.

The move comes even though IPOs on the Swiss exchange this year haven't thrived. Shares in Basel-based biotech firm Basilea Pharmaceutica AG (BSLN.EB) are down more than 20% since going public in March; chipmaker Austriamicrosystems (AMS.EB) was forced to lower the price range ahead of its IPO in May. The company's shares trade about 7% lower than the IPO price.

In 2003, Emmi reported CHF1.88 billion in sales, and recorded net profit of CHF42.7 million.

The company's cheese business accounted for 49% of 2003 sales, and 25% of sales came from dairy operations. The divisions produce and export butter, and cheeses such as Emmentaler, Gruyere and Appenzeller.

The company's chilled products division, with CHF461 million in 2003 sales, or 24% of total sales, includes yoghurt and specialty items such as Benecol which is designed to lower cholesterol. Emmi is pushing to increase the market for new products and will work with companies such as Finland's Raisio Yhtyma Oyj (RAIVV.HE), which makes the Benecol ingredient and wants export growth of at least 30% for the chilled products division.

"We are now preparing for the future with the aim of strengthening our capacity for innovation and implementing our growth strategy in a targeted manner, Emmi Chief Executive Walter Huber said in a press release.

The price range of the IPO is within expectations, a Zurich-based trader said.

Although the shares are also on offer to foreign investors, he said Swiss investors are likely to make up the bulk of Emmi's shareholders.

"The price is reasonable, Emmi has a decent brand name to consumers here in Switzerland that it can grow on, and it makes products that people can relate to, not anything high-tech," he said.

Emmi said its free float of shares will amount to 23.2% after the IPO, and may increase further when the conversion period for investors holding an outstanding convertible bond begins next year.

The shares on offer were created within the framework of a capital increase; existing shareholders have waived their subscription rights.

Emmi is allocating up to 20%, or 200,000 shares of the IPO for a friends and family program, which will include fellow milk producers, such as former majority owner, dairy cooperative Zentralschweizer Milchproduzenen.

UBS Investment Bank and Zuercher Kantonalbank are co-managing the transaction.

The subscription period runs from Tuesday until Dec. 3.

Company Web site: http://www.emmi.ch

-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043; katharina.bart@dowjones.com