Dean Foods
February 17, 2020

DFA To Purchase 44 Dean Foods Facilities, Additional Assets For $425 Million

 |  By: Anna-Lisa Laca

Dairy Farmers of America, Inc. (DFA) today announced they have reached an agreement with Dean Foods to acquire 44 of the processors facilities and associated direct store delivery system, as well as certain corporate and other assets and functions. 

According to cooperative officials, the two parties have been working to reach an agreement since DFA became aware of Dean’s plan to initiate voluntary Chapter 11 reorganization proceedings.

As part of the proposed deal, which awaits approval from the bankruptcy court overseeing Dean Foods’ chapter 11 and the U.S. Department of Justice (DOJ), DFA has agreed to pay a base purchase price of $425 million, and assume various liabilities, subject to certain adjustments. 

“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 in a statement. “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.”

Dean Plants DFA

Last month, The Wall Street Journal reported the DOJ was investigating the potential for anti-trust issues should DFA purchase assets from Dean Foods. It’s no surprise that the nation’s largest dairy cooperative purchasing plants from the nation’s largest fluid milk processor would trigger concerns. 

While executive vice president and chief of staff at DFA Monica Massey couldn’t comment much on the deal at that point, she emphasized the cooperative is interested in specific assets and looking for a deal that’s “fair for all.”

“Not just for DFA members, but other farmers, too,” she told Farm Journal’s MILK adding that a lot of people were counting on Dean Foods. “You’ve got a lot of farmers shipping to them, a lot of employees working with them, a lot of communities counting on them, and a lot of school programs in need of their product.”

How can Dean Foods go bankrupt with minimal disruption in the industry? 

“Somebody has to buy those plants,” she said. 

Because the reached agreement still awaits approval, details of the sale are not being disclosed at this time. 

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