Dairy Farmers of America Proposes $425 Million Deal for Dean Foods Assets

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 [e-mail]

(END) Dow Jones Newswires

February 17, 2020 12:00 ET (17:00 GMT)

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