The Department of Justice announced the conclusion of its investigation into proposed acquisitions by Dairy Farmers of America Inc. (DFA) and Prairie Farms Dairy Inc. of fluid milk processing plants from Dean Foods Company (Dean) out of bankruptcy.
The department’s investigation was conducted against the backdrop of unprecedented challenges in the dairy industry, with the two largest fluid milk processors in the U.S., Dean and Borden Dairy Company, in bankruptcy, and Dean faced with imminent liquidation.
The department’s Antitrust Division, along with the offices of the Massachusetts and Wisconsin attorneys general (Plaintiff States), filed a civil antitrust lawsuit today in the U.S. District Court for the Northern District of Illinois to block DFA’s proposed acquisition of three fluid milk processing plants from Dean, which are located in northeastern Illinois, Wisconsin, and New England.
At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit through the divestiture of plants located in in Harvard, Illinois; De Pere, Wisconsin; and Franklin, Massachusetts, as well as associated equipment and other assets related to fluid milk production, to an acquirer or acquirers approved by the U.S.
During its investigation, the department also expressed concerns to DFA and Dean about the potential loss of competition if DFA were to acquire a number of Dean’s fluid milk processing plants in the Upper Midwest, and DFA subsequently ceased its efforts to acquire those plants.
The department is also closing its investigation into Prairie Farms’ proposed acquisition of fluid milk processing plants from Dean in the South and Midwest after concluding that the plants at issue likely would be shut down if not purchased by Prairie Farms because of Dean’s distressed financial condition and the lack of alternate operators who could timely buy the plants.
Settlement with DFA and Dean will ensure the continued operation of dozens of fluid milk plants and that supermarkets, schools, convenience stores, hospitals, and other consumers of fluid milk are not harmed by the loss of Dean’s processing plants due to its bankruptcy. ■