(Bloomberg) -- Dairy Farmers of America Inc, the biggest U.S. dairy cooperative, is in advanced talks to acquire U.S. milk processor Dean Foods Co. But other would-be buyers could emerge.
While discussions are taking place between DFA and Dean, no agreement has been reached for the purchase of all or some of the Dallas-based company's assets, Monica Massey, executive vice president and chief of staff at DFA, said in an emailed response to questions. She didn't speculate on prospective bidders.
Read More: Dean Foods Files Bankruptcy With Potential Buyer Lined Up
A deal could be a lengthy process, including an antitrust review. Any transaction would require an “extensive review of Dean Foods' assets, thorough due diligence and other conditions, including approval from the Department of Justice and the Bankruptcy Court,” Massey said. Dean intends to file bidding procedures with the court to conduct a sale.
“We have been monitoring Dean Foods' financial performance closely since the business began showing signs of distress and have been preparing for various scenarios, including a bankruptcy filing, in order to minimize the impact to DFA,” Massey said. “Our farmer leaders and management have built our cooperative to withstand a situation like this. Our members and employees will get paid, schools will get milk, and dairy products will remain on the shelves across the country.”
Read More: Dean Foods' Valuation Likely Asset-Based Due to Secular Declines
Dean Foods is the biggest customer of the Kansas City-based cooperative, which has around 14,500 family farmer members around the country. DFA is focused on “ensuring we have secure markets for our members' milk,” she said.
While Americans may be drinking less conventional milk, 94% of U.S. households also keep it in their refrigerators, Massey said. The dairy category as a whole remains strong, with cheese and butter at all-time consumption highs. Americans ate 2.5% more dairy in August than they did the year before, and the retail market is worth over $100 billion, she said.
To contact the reporters on this story: Lydia Mulvany in Chicago at lmulvany2@bloomberg.net;Katherine Doherty in New York at kdoherty23@bloomberg.net
To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Patrick McKiernan
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
