The Justice Department had filed an antitrust lawsuit against Dean objecting to the purchase of two plants from Foremost Farms – both in the state of Wisconsin. These were acquired by Dean when it bought the consumer products division of Foremost Farms USA in April 2009.
Dean said the divestiture would include the 170,000-square-foot fluid dairy processing facility in Waukesha, near Milwaukee, along with equipment.
Associated brands Golden Guernsey and La Vaca Bonita would also be included in the deal, said the company, along with other related assets.
In the proposed settlement, published on the 29th March, Dean agreed to sell the Waukesha plant but is allowed to keep the facility in DePere.
In the Foremost Farms case, the size of the deal had not been big enough for Dean to be required to report it. The Justice Department only learned about the acquisition after it had been completed and only filed a lawsuit at that point.
It was concerned that the deal would eliminate significant competition in the sale of milk in Illinois, Michigan and Wisconsin. These fears have now been alleviated by the agreement struck with Dead.
“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 Justice Department’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.”
Dean Foods refused to accept that the Foremost Farms acquisition had compromised competition but said the settlement was still the best outcome.
“We continue to believe that our acquisition of the Foremost Farms assets in Wisconsin supported competition and benefited 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,” said the company.