Dallas stationed Dean Foods has achieved a $425 million agreement to sell 44 of its milk processing facilities to Dairy Farmers of America as part of a court-supervised sale of firm assets.
Dean Foods, which filed for bankruptcy last November, described the settlement as covering a “substantial portion” of its operations.
The corporation has 57 manufacturing plants in 29 states, along with five in Texas that are part of the Dairy Farmers of America agreement.
Dairy Farmers of America is a cooperative that’s controlled by farmers and has plants throughout the nation.
Under the agreement, Dairy Farmers of America agreed to make job offers to Dean Foods staff at the 44 plants. Dean Foods has nearly15,000 employees across the nation.
The deal must be permitted by a federal bankruptcy court supervising Dean Foods’ asset sales. A hearing on the agreement is scheduled for March 12.
Dean Foods stated it’s in talks with other parties for facilities and assets not included in the Dairy Farmers of America deal. Court documents point out its investment banker, Evercore Group, acquired interest from 99 strategic or financial consumers after the bankruptcy filing.
As the country’s largest dairy producer, Dean Foods spent a lot of last year in quest of a buyer as dwindling milk consumption and competition from high-volume retailers like Walmart consumed its core business.
Dean Foods has been working with $850 million in court-approved financing supported by its debt holders.
The International Brotherhood of Teamsters, which stand with around 5,000 of the workers, has urged the court to reject the corporation’s plan to award $37.75 million in bonuses to over 2,000 supervisory and salaried employees.