Dairy Farmers of America will acquire Dean's 44 facilities and associated direct store delivery system
DFA has agreed to acquire substantial part of Dean Foods (Credit: Gerd Altmann from Pixabay)
Dairy Farmers of America (DFA) has agreed to purchase a substantial portion of assets and business from dairy processor Dean Foods for $425m.
As a stalking horse bidder, DFA will acquire Dean’s 44 facilities and associated direct store delivery system in addition to certain corporate and other assets and functions.
Claimed to be the largest dairy company in the US, Dean Foods markets its products under different brands such as DairyPure, Land-O-Lakes, TruMoo, Friendly’s, Mayfield, Dean’s, Meadow Gold, Tuscan, T.G.Lee and Alta Dena.
Dean Foods filed for Chapter 11 bankruptcy in November 2019 due to the decline in consumption of cow’s milk
In November 2019, the company filed for Chapter 11 bankruptcy, as a result of the reduction in consumption of cow’s milk and an increase in demand for the plant milk.
Even though both firms have signed an agreement on the terms of the asset purchase, the deal is subject to various approvals, including approval from the Bankruptcy Court overseeing Dean’s Chapter 11 reorganization and the US Department of Justice.
Latham & Watkins, Bryan Cave Leighton Paisner and Houlihan Lokey have advised DFA on the current deal.
DFA president and CEO Rick Smith said: “As Dean is the largest dairy processor in the country and a significant customer of DFA, it is important to ensure continued secure markets for our members’ milk and minimal disruption to the U.S. dairy industry.
“As a family farmer-owned and governed cooperative, no one has a greater interest in preserving and expanding milk markets than DFA. We are pleased that we have come to an agreement on a deal that we believe is fair for both parties.”
DFA, a national, farmer-owned dairy cooperative, works with major food companies to develop better ingredients for their customers. It supports and serves 14,000 family farmers.
In November 2019, China Mengniu Dairy signed an agreement to acquire Kirin Holdings Company’s Australian beverage unit Lion Dairy & Drinks for A$600m ($407m).