Danone is exiting Lifeway Foods, spelling an end to a takeover battle that spanned failed bids, legal disputes and ultimately, a strategic retreat.
The French multinational is set to offload shares worth $67.4m, marking the sale of its 23% stake in the leading US kefir manufacturer.
Danone first invested in Lifeway in 1999, taking a 15% stake for $6.5m. But in recent years, the relationship has increasingly soured – culminating in failed takeover bids, boardroom tensions, and legal disputes that weighed on Lifeway’s finances and strained ties between the two companies.
Danone’s acquisition bids – of around $283m and $307m, respectively – were rejected, creating a rift the two sides never quite recovered from. Lifeway accused Danone of undervaluing the business and attempting to force a leadership change; while Danone took the kefir maker to court over CEO payouts it had not approved.
Despite the tensions, Lifeway’s sales have continued to grow on the back of strong demand for health and wellness and gut health products. In FY25, the company reported record net sales and a sharp increase in profitability – a result it built on in Q1 2026, with sales up 36.7% year-on-year to $63m and net income up to $4.7m. But its protracted legal and corporate battle with Danone has also taken a financial toll, with administrative costs rising by over $2m in 2025 as legal fees mounted – making a separation an increasingly welcome reprieve.
For Danone, remaining in the kefir business has become a game of diminishing returns. Once its plan to acquire the remaining shares fell flat in late 2025, the food and beverage major quietly laid the groundwork for an eventual exit – relinquishing key board control rights and agreeing to a non-disparagement clause as part of the cooperation deal reached after it became clear a full acquisition was unworkable.
At the same time, Danone invested in its own gut health brands, refreshing Activia in North America and adding more science-based, functional nutrition strength through the acquisitions of The Akkermansia Company, Kate Farms and most recently, Huel.
Danone and Lifeway: A timeline of the breakdown
- September 2024: Danone launches a takeover bid worth around $283m for Lifeway, offering $25 per share.
- November 2024: Lifeway rejects the initial bid as 'opportunistic'; Danone returns with an improved $307m ($27/share) offer, which is also turned down.
- March 2025: Danone files a lawsuit against Lifeway over alleged breaches of the shareholder agreement.
- Summer 2025: Boardroom tensions escalate as key shareholders push for leadership changes at Lifeway, with Danone signalling support.
- August–September 2025: Acquisition talks briefly resume, but collapse again after due diligence, with Danone walking away.
- October 2025: The two sides sign a cooperation agreement: lawsuits are paused, governance changes implemented, and the groundwork for Danone’s eventual exit is laid.
- May 2026: Danone sells its remaining stake for around $67.4m, formally ending its long-running relationship with Lifeway.
Did Danone miss out on a Lifeway deal?
With the split now all but complete – Danone’s share transaction set to close today, 19 May – analysts would watch closely if the failed takeover bid would prove costly.
For Lifeway, the latest financial results offer some validation for holding firm on its valuation. Danone’s bids implied a relatively low EBITDA multiples (around 7 to 8.5x), levels more typical of a mature business than a high-growth asset. And growth there is, though the key question remains how long it can be sustained.
For Lifeway CEO Julie Smolyansky, the runway is still long.
“We believe Lifeway is uniquely positioned at the intersection of numerous consumer tailwinds with our on-trend, functional product offerings,” she told investors last week. “The consumer focus on health and wellness continues to increase, gut-health awareness is spreading and demand from GLP-1 users seeking nutrient-dense, probiotic foods is particularly strong.”
For Danone, protein and gut health remains part and parcel of its strategic direction – and the company has proved it’s able to bet on high-growth businesses, provided the valuation aligns with its own expectations.
