(Corrects third bullet point to say Arcandor aims for synergies of 5 percent of 7 bn euros, not 7 bln in synergies)
* Arcandor to bundle the group's procurement
* Sets mid-term margin targets for core divisions
* Aims to save 5 percent of 7 bln eur purchasing budget
* Shares seen down 6.9 percent
(Adds details)
FRANKFURT, April 20 (Reuters) - Arcandor announced details of a restructuring plan on Monday, which will cost up to 900 million euros ($1.18 billion) over the next five years, the German retail and tourism group said.
The costs come on top of up to 776 million euros in loans, which are due for renegotiation with banks by mid-June.
Arcandor shares looked set to open 6.9 percent lower, according to pre-market data from brokers at 0627 GMT.
As part of the revamp, Arcandor plans to bundle the group's procurement "in a division to be established at management board level", it said in a statement.
"Via the new organisation of the processes and the bundling of volumes, the objective is to achieve synergies of up to 5 percent of the entire purchasing volume at Arcandor (excluding Thomas Cook) of over 7 billion euros within two to three years," Arcandor said.
The group set mid-term targets for its three core business divisions, aiming for core profit margin of 7 percent at its mail order unit Primondo and 6 percent at its department store unit Karstadt. Its travel arm Thomas Cook has announced an operating margin target of 4.8 percent.
Arcandor Chief Executive Karl-Gerhard Eick, who took over the helm at the troubled group last month, had told German newspaper Bild am Sonntag he would unveil a restructuring proposal to the supervisory board on Sunday. ($1=.7628 Euro) (Reporting by Eva Kuehnen)