USA – The U.S. Bankruptcy Court for the Southern District of Texas has approved the sale of a substantial portion of Dean Foods’ business operations, including the assets, rights, interests and properties valued at approximately US$564 million.
The dairy company, which filed for bankruptcy in November last year, had reached an agreement to sell 44 of the company’s fluid and frozen facilities to Dairy Farmers of America (DFA) for US$433 million. Dean Foods said that the sale has been approved.
Additionally, the sale of the company’s Uncle Matt’s business to Harmoni for US$7.25m as well as the sale of its Meadow Gold Hawaii operations as an ongoing business to Industrial Realty Group for US$25.5m were also given a go-ahead.
Other transactions that were also approved include Prairie Farms Dairy purchase of eight additional facilities, two distribution branches and certain other assets for US$75 million and the sale of Dean Foods’ facility in Miami to Mana Saves McArthur for US$16.5 million.
The Court also approved Producers Dairy Foods’ purchase of Dean Foods’ Reno, Nevada facility for US$3.7 million and its purchase of the “Berkeley Farms” trademark and related intellectual property for US$3 million.
“Following the competitive court-supervised auction process, and with the Court’s approval, we have determined a combination of bids that represent the best path forward for our stakeholders,” commented Eric Beringause, President and CEO of Dean Foods.
“We are confident that, under these new owners, our customers can expect the same commitment to quality and service that Dean Foods has lived up to over the years.”
Each transaction remains subject to customary closing conditions, including any required regulatory approvals. The company anticipates completing all transactions by early May.
Despite market trends indicating that the US dairy industry is under severe pressure, the country’s dairy industry has been seen to significantly benefit from the export market.
Unites States reported an 8% year-on-year increase in annual dairy exports in 2019, reaching a new five year high of US$6.025 billion, according to data from the US Dairy Export Council.
However, local consumption has been on the decline for decades. The consumption has declined up from accounting 15% share of all eating occasions three decades ago to only a 9% share in 2019, according to the NPD Group.
Changing consumer demands and new product innovations are expected to continually shape the future of the dairy industry in this market.