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Dairy Farmers of America Purchase of Dean Foods OK’d by Fed

Deal meets antitrust scrutiny in 'tumultuous time for the dairy industry'
Photograph: Shutterstock

Dairy Farmers of America (DFA), which lost its stalking-horse position in the acquisition of Dean Foods but ended up as the winning bidder at auction for 44 of the company’s fluid and frozen facilities, has had its purchase approved by the antitrust division of the U.S. Department of Justice. The deal was amended to include DFA’s sale of three Dean Foods plants in Illinois, Wisconsin and Massachusetts. The department’s investigation was conducted against the backdrop of unprecedented challenges in the dairy industry, with the two largest fluid milk processors in the U.S., Dean Foods and Borden Dairy Co., in bankruptcy, and Dean faced with imminent liquidation.

The antitrust department also was looking into Dean’s deal to sell assets, rights, interests and properties of eight facilities, two distribution branches and certain other assets to Prairie Farms Dairy.

“This is a tumultuous time for the dairy industry, with the two largest fluid milk processors, Dean and Borden Dairy Co., in bankruptcy, and a pandemic causing demand for milk by schools and restaurants to collapse. In the face of these challenges and Dean’s worsening financial condition, the department conducted a fast but comprehensive investigation, and our actions today preserve competition for fluid milk processing in northeastern Illinois, Wisconsin and in New England,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “In addition, the closing of the department’s investigation into Prairie Farms’ acquisition will preserve necessary outlets for dairy farmers and keep milk on consumers’ refrigerator shelves by keeping the plants in operation.”

Last month, Dean Foods also agreed to sell its Meadow Gold Hawaii operations in Hilo and Honolulu to Industrial Realty Group, who will partner with 8 Cow Dairies, a Hawaii-based company, to manage operations. Mana Saves McArthur LLC and Producers Dairy Foods were designated as winning bidders for the sale of the facilities in Miami and Reno, Nev., respectively. Harmoni Inc. was designated as the winning bidder for the Uncle Matt’s business.

DFA is a Kansas cooperative marketing association based in Kansas City, Kan. It has nearly 14,000 farmer members across the United States. DFA had 2018 revenues of $13.6 billion. 

Prairie Farms is an Illinois corporation based in Edwardsville, Ill. It has more than 700 farmer members and annual revenues of over $3 billion. 

Dean Foods is a Delaware corporation based in Dallas, Texas. It operates 57 fluid milk processing plants in 29 states. Dean had 2018 revenues of $7.75 billion. On Nov. 12, 2019, Dean filed for Chapter 11 bankruptcy protection and will cease to operate as a going concern in May 2020. 

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