Dairy Farmers of America (DFA) is attempting to acquire Dean Foods Company and some of its subsidiaries for $425 million, according to the Kansas City Business Journal. The asset purchase agreement includes 44 Dean Foods fluid and frozen facilities and the real estate, inventory, and equipment needed to operate such facilities. The news of the acquisition comes months after Dean Foods filed Chapter 11 bankruptcy in 2019.
“We have had a relationship with DFA over the past 20 years, and we are confident in it 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 Chief Executive Officer of Dean Foods. “I would like to thank all Dean Foods employees for their continued commitment to our customers, our partners, and our company throughout this process. Their efforts have enabled us to continue providing an uninterrupted supply of high-quality dairy products, as well as support our dairy suppliers, vendors, and other partners as we work to determine the best path forward for our business.”
According to a press release, the Bankruptcy Court will have to approve DFA as a “stalking horse bidder” for the Stalking Horse Assets in a court-supervised sales process, whereby the agreement with DFA will set the floor for the sale of the Stalking Horse Assets. However, while DFA is working to acquire Dean Foods, the transaction is still subject to higher or better offers—the deadline for potential bidders to throw their hat into the ring is March 31, 2020.
The press release also noted that Dean Foods is in active discussions with parties interested in the plants and assets that are not included in the Stalking Horse Assets.
A hearing to approve the sale is proposed to be held on April 27, 2020, subject to the availability of the Bankruptcy Court. In addition to Bankruptcy Court approval, the proposed transaction with DFA is subject to various closing conditions, including antitrust clearance.
Will Dairy Farmers of America successfully acquire Dean Foods? Or will another dairy giant step up to the auction block? Deli Market News will continue to report.