Dean Foods Purchase Being Challenged

DOJ has filed suit claiming antitrust violation.

Published on: Jan 26, 2010

The U.S. Justice Department has filed a lawsuit against Dean Foods Company seeking to undo its April 2009 purchase of dairy processing plants from Foremost Farms USA because of competition concerns. In its legal documents, the DOJ argues the deal eliminated substantial competition between the two companies in the sale of milk to grocery stores, schools, convenience stores and other retailers in Illinois, Michigan and Wisconsin. Those three states have joined the suit.

 

In a lawsuit filed in U.S. District Court in Wisconsin, the Justice Department's antitrust division asked a judge to order Dean Foods to sell the dairy processing plants it acquired and notify the government before any future acquisitions of milk processing operations. Because the deal value was below a certain threshold at the time, $65.2 million, the companies did not have to notify antitrust authorities before moving forward with it.

 

In announcing that is was contesting the complaint, Dean Foods called the government's decision to challenge the deal unsound, both legally and economically. The company believes an objective judicial review of the facts will reveal that competition is alive and flourishing in Wisconsin.