Dean Foods settles Foremost antitrust lawsuit

by Keith Nunes
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WASHINGTON — Dean Foods Co. will divest the Waukesha, Wis., milk processing plant, additional assets and the Golden Guernsey brand name it acquired from Foremost Farms Cooperative USA in April 2009 in a settlement with the U.S. Department of Justice. The D.O.J. had filed an antitrust lawsuit in early 2010 challenging the acquisition. In addition, Dean Foods also agreed to notify the D.O.J. before it makes any future acquisition of milk processing plants for which the purchase price is more than $3 million.

“The proposed settlements restore competition so that school children and consumers in Illinois, Wisconsin and Michigan, will pay lower prices for their milk,” said Christine Varney, assistant attorney general in charge of the Department of Justice’s Antitrust Division. “The divestiture of a significant milk processing plant and the provision that requires Dean to notify the department of future milk plant acquisitions will ensure that competition remains in this important industry.”

In a statement, Dean Foods said, “Dean Foods is pleased to have reached agreements to settle lawsuits with the U.S. Department of Justice, and the States of Wisconsin, Illinois and Michigan. Dean Foods will divest the Waukesha, Wis., plant and operations that it acquired in 2009 from Foremost Farms, including the Golden Guernsey and La Vaca Bonita brands.

“The DePere plant and operations will remain with Dean Foods. We continue to believe that our acquisition of the Foremost Farms assets in Wisconsin supported competition and benefitted consumers. However, because ongoing litigation is expensive, distracting and brings uncertainty to our business, we believe that this resolution is in the best interest of our employees, shareholders, customers and consumers. It allows us to move forward and focus on our core business objectives.”

In April 2009, Dean Foods acquired Foremost’s Consumer Products Division, including its dairy processing plants in Waukesha and De Pere, Wis. The D.O.J. said it learned of the transaction, which was not required to be reported under the premerger notification law, shortly after it was completed. After investigating the acquisition, the department and the state attorneys general filed a lawsuit alleging that Dean’s acquisition would eliminate competition between the two companies in the sale of milk to schools, grocery stores, convenience stores and other retailers, in Illinois, Michigan and Wisconsin.

Given its size, location and distribution network, the D.O.J. said it determined the divestiture of the Waukesha dairy plant addressed the competitive concerns in Illinois and Wisconsin.

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