On Dec. 17, DFA confirmed the sale of the Illinois and Wisconsin facilities to a joint venture owned by The Borden Dairy Company and Select Milk Producers Inc. Terms of the sale were not announced.
However, in a statement provided to Progressive Dairy on Dec. 18, DFA said it would retain ownership and integrate the Garelick Farms processing facility in Franklin, Massachusetts, into its other operations.
Last April, Judge David Jones in the U.S. Bankruptcy Court for the Southern District of Texas approved the sale of 44 of Dean’s 57 fluid milk plants and other assets to DFA, pending a DOJ antitrust investigation. In May, under terms of consent agreement with DFA, DOJ ordered the cooperative to divest of three of those facilities: a Morning Glory Dairy plant in De Pere, Wisconsin; a Dean dairy processing plant in Harvard, Illinois; and the Garelick Farms dairy plant in Massachusetts. Without divestiture, DOJ said those acquisitions gave DFA about 70% of the fluid milk market in northeastern Illinois and Wisconsin and about 51% of the market share in New England.
Read: DOJ orders DFA to divest three Dean facilities.
To formalize the divestiture order, the DOJ’s Antitrust Division, along with attorneys general offices in Massachusetts and Wisconsin, filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of Illinois/Eastern Division. In early October, U.S. District Judge Gary Feinerman approved the judgment, which described provisions and timelines for the sale of the three facilities.
Borden Dairy, which also went through bankruptcy proceedings in 2020, was purchased by private equity firm KKR & Co. and investment firm Capitol Peak Partners, which created a new entity, New Dairy Opco LLC. Leading Capitol Peak Partners is Gregg Engles, the former head of Dean Foods.
One of the terms of the final judgment stipulated that if alternate buyers could not be found and all sales efforts were exhausted, the court could modify the order and allow DFA to retain the facilities and assets.
Both DFA and the DOJ-appointed divestiture trustee were unsuccessful in identifying a viable buyer for Garelick Farms, according to the statement from DFA.
“Garelick Farms is critical to milk processing in New England. This facility has significant importance to dairy farmers in the Northeast for both its processing capabilities and providing customers in the region with wholesome dairy products,” the DFA statement said.
There’s still an unfinished court proceeding involving former Dean facilities purchased by DFA. Food Lion LLC and the Maryland and Virginia Milk Producers Cooperative Association filed a lawsuit, asking that DFA also be ordered to divest of at least one former Dean facility in North Carolina and South Carolina. 
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Dave Natzke
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- Progressive Dairy
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