Davis Polk advised Dean Foods on antitrust and competition aspects of the sale of substantially all of Dean Foods’ assets and business operations pursuant to Section 363 of the Bankruptcy Code to six third-party acquirers, including Dairy Farmers of America (“DFA”) and Prairie Farms.

The U.S. Department of Justice conducted a detailed investigation of the DFA and Prairie Farms transactions.  It approved both deals, subject to a consent decree pursuant to which DFA committed to hold separate and ultimately divest the dairy processing plants in Wisconsin, Massachusetts and Illinois.

In announcing this decision, Assistant Attorney General Makan Delrahim stated: “This is a tumultuous time for the dairy industry, with the two largest fluid milk processors, Dean and Borden Dairy Company, in bankruptcy, and a pandemic causing demand for milk by school and restaurants to collapse.  In the face of these challenges and Dean’s worsening financial condition, the department conducted a fast but comprehensive investigation, and our actions today preserve competition for fluid milk processing in northeastern Illinois, Wisconsin, and in New England.”

Prior to the closings, Dean Foods was a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the U.S. DFA is made up of 14,000 diverse family farmers from across the country and is the largest U.S. dairy-farming cooperative by membership. See Justice Department Requires Divestitures as Dean Foods Sells Fluid Milk Processing Plants to DFA out of Bankruptcy, U.S. Department of Justice Press Release 20-420, May 1, 2020; Dean Foods Completes Sale of Assets to Dairy Farmers of America, Business Wire, May 1, 2020.

The Davis Polk team advising Dean Foods was led by partners Arthur J. Burke and Howard Shelanski.

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