KANSAS CITY (WMTV) -- Dairy Farmers of America has swooped in to buy one of its biggest buyers of milk products, the now-bankrupt Dean Foods, the farmer-owned cooperative announced Monday.
"As Dean is the largest dairy processor in the country and a significant customer of DFA, it is important to ensure continued secure markets for our members' milk and minimal disruption to the U.S. dairy industry," DFA President and Chief Executive Officer Rick Smith explained in a statement announcing the deal.
The Kansas City-based cooperative has been working with Dean on a deal ever since learning the company was about to declare bankruptcy late last year. Dean officially began its Chapter 11 reorganization proceedings in November, with DFA looming as a stalking horse bidder.
DFA intends to purchase 44 of Dean’s facilities and their related store delivery system as well as corporate and other assets for $425 million. They will also take on some of Dean’s current liabilities.
"As a family farmer-owned and governed cooperative, no one has a greater interest in preserving and expanding milk markets than DFA. We are pleased that we have come to an agreement on a deal that we believe is fair for both parties," Smith added.
The deal may require some adjustments before being finalized DFA notes and it will still require the approval of the bankruptcy court and the Department of Justice.