Beverages

Dairy Farmers of America to Acquire ‘Substantial Portion’ of Dean Foods

$425 million transaction includes 44 facilities, DSD system
Dean Foods
Photograph: Shutterstock

KANSAS CITY, Kan. — Dairy Farmers of America (DFA) has reached an agreement with Dean Foods to acquire a substantial portion of Dean’s assets and business.

The two parties have been working on an agreement since Dean announced in November it would file for Chapter 11 bankruptcy, according to DFA.

DFA has agreed to pay a base purchase price of $425 million and assume various liabilities to acquire 44 of Dean’s facilities and associated direct-store delivery system, as well as certain corporate and other assets and functions.

“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,” said Rick Smith, president and CEO of DFA. “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.”

If approved as the stalking horse bidder, Kansas City, Kan.-based DFA would be allowed to make an initial bid for Dean’s assets and would be allowed bidding protections. The transaction remains subject to various approvals, including approval from the Bankruptcy Court overseeing Dean’s Chapter 11 reorganization and the U.S. Department of Justice, according to DFA.  

DFA is a milk marketing cooperative and dairy foods processor with more than 14,500 farmer-members. 

Dean Foods, the nation’s largest processor and direct-to-store distributor of fluid milk, has about 15,000 employees and is known for brands such as Land O’Lakes, DairyPure and TruMoo.

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