Dairy Farmers of America announced Monday that it has agreed to buy Dean Foods, America’s largest milk producer, for a stalking horse bid of $425 million, according to a statement on their website.
In November, Dallas-based Dean Foods declared bankruptcy and blamed a decadeslong drop in milk consumption that has seen people turn to alternatives like soda, juice and almond milk, for the decline in revenue. As of last fall, the company lost money in eight of its last 10 quarters and posted declining sales in seven of the last eight.
“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, DFA president and CEO. “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.”
The dairy co-operative said as part of the deal they will assume Dean’s liabilities and will acquire 44 of the company’s facilities, their direct store delivery system as well as other corporate assets and functions.
The transaction remains subject to various approvals, including approval from the bankruptcy court and Department of Justice.
Dean employs 16,000 people and operates 60 processing facilities across the country. On any given day, it is running 8,000 refrigerated delivery trucks on U.S. roads.
Dean Foods supplies milk for its own brands, like Dairy Pure, Meadow Gold and TruMoo, as well as store brands.
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Last month, Borden became the second Dallas-based dairy to file for bankruptcy protection.
