Dairy Farmers of America Proposes $425 Million Deal for Dean Foods Assets
February 17 2020 - 12:15PM
Dow Jones News
By Jacob Bunge
Agricultural cooperative Dairy Farmers of America agreed to a
$425 million deal to purchase dozens of facilities from Dean Foods
Co., the bankrupt milk-processing giant.
The deal includes 44 facilities producing fluid milk and other
products, Dean said. It will require approval from the bankruptcy
court as well as the U.S. Justice Department, the companies
said.
Dallas-based Dean, the largest U.S. milk processor, filed for
bankruptcy protection in November, citing a yearslong decline in
sales of fluid milk, the company's main business. Consumers are
drinking less milk, as bottled water and plant-based milk
alternatives have boosted beverage-sector competition.
Dean has also faced pressure from grocery retailers, like
Walmart Inc., which have opened their own milk-bottling plants to
sell store-brand milk at low prices.
Dairy Farmers of America, based in Kansas City, Kan., is the
largest U.S. dairy-farming cooperative by membership. It also
operates its own milk-processing plants and dairy facilities, and
announced in November it was discussing a potential deal with Dean
that would expand the cooperative's operations and maintain markets
for farmers' milk. The Justice Department has been probing the
potential deal's potential impact on farmers and regional milk
markets.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
February 17, 2020 12:00 ET (17:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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