Danone bids to acquire US kefir maker Lifeway Foods for US$25 a share

Dairy multinational Danone has proposed to acquire Lifeway Foods, a US supplier of kefir and fermented probiotic products, for US$25 a share in cash to enable the company to “achieve its full potential.” 

Lifeway acknowledges that Danone’s offer is unsolicited and non-binding and seeks to acquire all outstanding shares of common stock of the company it does not already own.

The French dairy giant has been a shareholder of the health food player. According to a Schedule 13D amendment filed with the US Securities and Exchange Commission, Danone owns approximately 23.4% of Lifeway’s outstanding common stock beneficially.

“Unlock opportunities”

The kefir maker announced that its board of directors will review and evaluate the proposal to determine what’s in the company’s and its stakeholders’ best interests in consultation with external advisors. It said it does not fall under any obligation to share updates on this proposal or transaction except as stipulated by the law.

Shane Grant, the Danone deputy CEO, noted Lifeway’s “solid performance” over the last few years in a letter sent to its CEO, adding that the acquisition would remove constraints facing a listed company of its size.

“We are confident that Danone’s operations and dedicated resources would unlock significant opportunities and value for Lifeway, notably by providing further innovation, distribution and marketing support,” reads the letter.

In addition to its drinkable kefir line, Lifeway’s products to support the microbiome include its cheeses and kefir for kids. Its dairy products are sold in the US, Mexico, Ireland, South Africa and France.

Business moves

Danone partnered with Ajinomoto to reduce greenhouse gas (GHG) emissions from the milk supply chain using AjiPro-L, a lysine supplement for cow feed.

The GHG reduction method intends to be “highly cost-effective” as it delivers lysine, an essential amino acid, to cows’ digestive systems, where it is absorbed as a nutrient. The efforts are part of Danone’s “Partner for Growth” program.

The French multinational is also on track to withdraw the Nutri-Score label from its dairy and plant-based drinkable product packaging in Europe, a move that has been criticized by experts. The company states that the action is in response to an amended algorithm last year that places all “potable” or drinkable products under the umbrella of beverages.