The U.S. Justice Department is poised to approve the acquisition of most of Dean Foods’ assets by Dairy Farmers of America (DFA), contingent on the divestiture of three Dean processing plants to another buyer.
The Justice Department had been investigating the sale of Dean’s plants and other assets to DFA and other buyers on antitrust grounds. Dean declared bankruptcy last November and reached a deal about four months later in which DFA would buy most of Dean’s processing plants.
The deal immediately drew criticism from dairy farmers and others, who said that it would leave DFA, Dean’s largest supplier, in control of too much of the American liquid milk market. The Justice Department’s antitrust division looked into the deal and determined that it would not unduly stifle competition as long as three particular plants were not involved.
The Justice Department, along with the attorneys general of Massachusetts and Wisconsin, filed a pro forma lawsuit to keep DFA from acquiring those plants, located in Harvard, Ill.; De Pere, Wis., and Franklin, Mass. DFA’s acceptance of the terms will close out the lawsuit.
In a statement announcing the deal, assistant U.S. attorney general Makan Delrahim noted the challenges facing the liquid milk industry from the bankruptcies of Dean and its biggest competitor, Borden Dairy, as well as the disruption of demand for milk in schools and other venues due to the coronavirus pandemic. “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,” Delfahim said.
In addition, the Justice Department approved the sale of eight plants in the South and Midwest to Prairie Farms Dairy after concluding that they would likely close otherwise.
