DOJ Allows Mega Dairy Deal But With Divestments

Justice Department antitrust authorities cleared the way for Dairy Farmers of America (DFA) to buy the bulk of Dean Foods’s milk plants out of bankruptcy, uniting the nation’s largest dairy cooperative by membership with the biggest milk processor.

The Justice Department announced Friday, May 1, it would approve DFA’s US$433 million purchase offer, subject to certain conditions, against the backdrop of “unprecedented challenges in the dairy industry” and Dean’s potential liquidation in the event the proposed deal fell through, reported The Wall Street Journal. 

“The department conducted a fast but comprehensive investigation, and our actions today preserve competition for fluid milk processing,” Assistant Attorney General Makan Delrahim said.

As a condition of the deal, the Justice Department required the divestiture of three Dean plants in Illinois, Wisconsin, and Massachusetts to remedy potential competitive harm. 

Neither Dairy Farmers of America nor Dean responded to requests for comment beyond the Justice Department announcement.

Dean filed for bankruptcy in November and was followed into chapter 11 in January by another large fluid-milk processor, Borden Dairy, as falling milk consumption puts intensifying pressure on the highly regulated industry. Dean, the top US milk processor by sales, had struggled for years with slumping demand as consumers gravitated to other beverages, including milk alternatives made from soy and oats.

Full Content: Wall Street Journal

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