KANSAS CITY, Kan. (Dairy Farmers of America Press Release/WLUC) - On Monday, the Dairy Farmers of America, Inc. (DFA) announced an agreement has been reached with Dean Foods (Dean) for the farmer-owned Cooperative to become the stalking horse bidder to acquire a substantial portion of Dean's assets and business.
The organizations have been working to reach an agreement since the dairy farmers heard of Dean's plans for Chapter 11 bankruptcy plans.
As part of the proposed deal, DFA has agreed to pay a base purchase price of $425 million, along with liabilites with adjustments, to acquire 44 of Dean's facilities and associated direct store delivery system, as well as certain corporate and other assets and functions.
Though the DFA and Dean Foods have reached an agreement, it still must be approved by the bankruptcy court overseeing Dean's reorganization and the U.S. Department of Justice.
"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 Chief Executive Officer. "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 is advised in this matter by Latham & Watkins, LLP, Bryan Cave Leighton Paisner, LLP and Houlihan Lokey.
Dean Foods acquired Marquette-based Jilbert Dairy in August 2006.
In a statement to TV6 & FOX UP in November 2019, Anne Divjak, Vice President of Government Relations & External Communications for Dean Foods Company, said, "We are operating as normal and continuing to provide customers with an uninterrupted supply of high quality products. The means products from the Dean Foods family of brands, including Jilbert’s Dairy, will continue to be available across Upper Michigan where consumers usually shop."
About Dairy Farmers of America: Dairy Farmers of America is a national, farmer-owned dairy cooperative focusing on quality, innovation and the future of family dairies. While supporting and serving 14,000 family farmers, DFA works with some of the world's largest food companies to develop ingredients that satisfy their customers' cravings while staying committed to social responsibility and ethical farming. For more information, please visit dfamilk.com.