Danone (Apparently) Ends Acrimonious Pursuit of Lifeway Foods
Danone announced it’s no longer pursuing its acrimonious acquisition of American kefir maker Lifeway Foods – although the French company noted it’s considering voting its shares in favor of a proposal to replace Lifeway’s entire board of directors.
“In the course of our due diligence review of Lifeway, we were not able to confirm our previous proposal to acquire Lifeway," Danone said in a Securities & Exchange Commission filing. "We determined on Sept. 17 to no longer pursue an acquisition of Lifeway, and informed Lifeway of such on the same date.”
As a family dispute threatened to split Lifeway last year, Danone, which already owned a quarter of the company’s stock, offered to buy the company for $25 a share in cash, valuing the suburban Chicago company at about $318 million. After a quick rejection by the Lifeway board, Danone in November upped that offer to $27 a share.
A buyout apparently would end family infighting that has pitted CEO Julie Smolyansky against her mother and brother, who together own a majority of the company. Ludmila and her son Edward Smolyansky have been fighting to remove Julie and replace the board of directors. The company was started by Julie’s father, Michael Smolyansky.
Danone’s Sept. 17 filing with the Securities and Exchange Commission further noted, “We are now in the process of reviewing alternatives for our investment in Lifeway… We are also reviewing whether to vote the shares of Common Stock we own in favor of Edward Smolyansky's proposals set forth in his pending consent solicitation statement to replace the entire Lifeway Board of Directors, and we have not yet made a final decision in this regard.
“As part of our review, we may in the future take such actions with respect to our investment in Lifeway as we deem appropriate, including … selling all or part of our investment in Lifeway, continuing to hold our investment in Lifeway or changing our intention,” Danone continued.
The SEC filing noted “Danone North America PBC” has sole voting and sole dispositive power with regard to 3,454,756 shares of Lifeway common stock – apparently 23% of Lifeway, an investment it’s held for several years.
About the Author
Dave Fusaro
Editor in Chief
Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.