In a recent filing with the Securities and Exchange Commission, Danone announced that it is no longer pursuing an acquisition of kefir maker Lifeway Foods. The dairy giant also revealed that it is exploring options for its approximately 23% stake in Lifeway, which may include a potential sale.
The decision to abandon the acquisition came after Danone determined that the two companies would not be able to effectively work together. Instead of pursuing Lifeway, Danone will focus on exploring opportunities within its existing brands.
Danone had initially proposed to acquire Lifeway in September 2024 for $25 a share, later increasing the offer to $27. However, Lifeway rejected both proposals, stating that Danone undervalued the company.
Despite being a shareholder in Lifeway for over two decades, Danone has decided to move on from the acquisition due to differences in valuation. While kefir sales have been on the rise, Danone believes that the benefits of adding Lifeway to its portfolio are not worth the price being sought.
Danone, known for its healthy dairy products such as Activia and Oikos, has been focusing on expanding its offerings in the market. Lifeway, on the other hand, has been resistant to a takeover, previously accusing Danone of engaging in corporate bullying tactics.
With the acquisition off the table, Danone now has the opportunity to vote its shares in a long-running family saga affecting Lifeway. The company’s CEO, Julie Smolyansky, is facing pressure from her brother and mother to step down, citing corporate governance failures.
Danone had agreed not to vote its shares in favor of the relatives’ proposal while considering the acquisition. Now that the deal is no longer in play, Danone is free to vote as it sees fit. However, the company has not yet announced its decision on how it will vote.
Overall, the abandonment of the Lifeway acquisition marks a shift in Danone’s strategy and opens up new possibilities for both companies moving forward. The decision reflects the complexities of corporate acquisitions and the impact they can have on all parties involved.
