DFA Says Dean Purchase Completed

GLENWOOD, Iowa (DTN) -- Dairy Farmers of America over the weekend announced it had finalized the purchase of a substantial portion of dairy assets from former competitor Dean Foods Co.

The announcement comes after a settlement Friday involving the U.S. Department of Justice, along with two state attorneys general, to block the sale of three dairy processing plants by Dairy Farmers of America (DFA) as part of the Dean Foods Co. bankruptcy.

DFA will acquire 44 Dean Foods dairy processing facilities nationally for $433 million, but will agree to divest in processing facilities located in De Pere, Wisconsin; Franklin, Massachusetts; and Harvard, Illinois.

The Department of Justice, with the attorneys general in Massachusetts and Wisconsin, announced late Friday they reached a settlement to block DFA from taking over those three specific dairy processing facilities.

DFA stated in a news release that the transaction will ensure markets for dairy farmers as well as nearly 11,000 jobs nationally.

"As a cooperative founded, owned and governed by family farmers, the finalization of this agreement is important to our commitment to protecting and preserving family dairy farms for generations to come," DFA stated.

In blocking the sales of the processing facilities in Illinois, Massachusetts and Wisconsin, the Department of Justice stated the settlement "will ensure the continued operation of dozens of fluid milk plants and that supermarkets, schools, convenience stores, hospitals, and other consumers of fluid milk are not harmed by the loss of Dean's processing plants due to its bankruptcy."

Assistant Attorney General Makan Delrahim of the DOJ's Antitrust Division, stated the dairy industry is in a tumultuous time with both Dean Foods and Borden Dairy Co. in bankruptcy and a pandemic "causing demand for milk by schools and restaurants to collapse."

Delrahim said DOJ conducted a quick investigation, "But our actions today preserve competition for fluid milk processing in northeastern Illinois, Wisconsin and in New England."

DOJ stated it was closing an investigation into dairy processor Prairie Farms buying Dean Foods plants in the South and Midwest "after concluding that the plants at issue likely would be shut down if not purchased by Prairie Farms because of Dean's distressed financial condition and the lack of alternative operators who could timely buy the plants."

DFA is a Kansas cooperative with 47 facilities and roughly $15.9 billion in sales. Dean, based in Texas, operates 57 operations, but the company filed for Chapter 11 bankruptcy and began selling off its operations. Dean reached an agreement in February to sell 44 dairies to DFA for a reported $433 million, according to a news release from Dean Foods. The sale had been approved by a bankruptcy court earlier this month.

Prairie Farmers bought eight Dean Foods facilities and associated distribution centers for $75 million.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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