Dairy cooperative Dairy Farmers of America (D.F.A.) has offered $425 million and the assumption of liabilities to acquire some of Dean Foods Co.’s assets. Dean Foods filed for Chapter 11 bankruptcy on Nov. 12, 2019, and the offer, if accepted, will designate D.F.A. as the stalking horse bidder in the sale of Dean Foods.
The offer is for 44 of Dean’s 57 fluid and frozen facilities, its direct-store delivery system and certain corporate and other assets. Other interested parties have until March 31 to submit information to be considered a potential bidder.
“As Dean is the largest dairy processor in the country and a significant customer of D.F.A., it is important to ensure continued secure markets for our members’ milk and minimal disruption to the U.S. dairy industry,” said Rick Smith, president and chief executive officer. “As a family farmer-owned and governed cooperative, no one has a greater interest in preserving and expanding milk markets than D.F.A. We are pleased that we have come to an agreement on a deal that we believe is fair for both parties.”
In addition to bankruptcy court approval, the transaction will require approval from the U.S. Department of Justice given the scale both D.F.A and Dean Foods have in the U.S. dairy and milk processing industries. In January, the Wall Street Journal reported that D.O.J. officials were discussing the potential impact of a D.F.A. and Dean Foods merger on dairy farmers and retailers.
“We have had a relationship with D.F.A. over the past 20 years, and we are confident in their ability to succeed in the current market and serve our customers with the same commitment to quality and service they have come to expect,” said Eric Beringause, president and c.e.o. of Dean Foods.
By Keith Nunes
Source: Food Business News
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