DFA has agreed to acquire 44 of Dean Foods’ facilities and associated direct-store-delivery systems, as well as other assets. However, the DFA said its bid amounts to a ‘stalking horse’ offer, which will set the floor for the sale of Dean Foods’ assets for any other interested parties that want to submit a counter-bid.
Andy Coyne, Food Correspondent at GlobalData, says: “What Dean Foods has done through this deal is provide certainty to the US dairy industry in general and to liquid milk suppliers in particular.”
“Ever since Dean Foods filed for Chapter 11 bankruptcy protection in November, there have been fears about what would happen to such an important player in the US dairy market. What the DFA has effectively done through its ‘stalking horse’ plan is to underwrite the future of Dean Foods’ assets and to ensure against disruption in the milk supply chain by making sure those assets are not disposed of cheaply or piecemeal.
“The proposed agreement is subject to higher or otherwise better offers but DFA has set a floor to ensure only substantial bids will be considered.
“It’s a very neat solution to what had become a worrying problem for the US dairy industry.”