Danone has abandoned its pursuit of acquiring Lifeway Foods and is exploring its options for its investment in the US kefir maker.
Last month, Danone and Lifeway signed an NDA to allow the French giant to weigh up whether to make another bid for Lifeway after having two offers turned down.
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According to an SEC filing yesterday (18 September), Danone has decided against a fresh bid and is weighing alternatives that includes “selling all or part” of its approximately 22.7% stake in Lifeway.
In response, Lifeway issued a statement, affirming it remains “firmly committed to driving value for Lifeway shareholders by executing our strategic plan and continuing to explore value enhancing opportunities”.
The company said it had set up a strategic review committee consisting of independent directors to oversee the process and engaged “extensively” with Danone.
The Activia brand owner initially proposed acquiring Lifeway in September 2024 for $25 per share, raising the offer to $27 two months later.
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By GlobalDataLifeway rejected both bids, claiming they undervalued the company.
Tensions escalated, with Danone filing a lawsuit alleging Lifeway breached a shareholder agreement. Lifeway, in turn, described Danone’s offers as a “hostile takeover”.
Meanwhile, a long-running family dispute at Lifeway has intensified, with the company’s chair and CEO, Julie Smolyansky, facing opposition from her mother and brother, Ludmila and Edward Smolyansky.
In July, the mother-and-son duo, who are the company’s largest shareholders, submitted a “definitive consent statement” to the SEC, seeking to replace Lifeway’s board, including Julie, with nominees “focused on restoring accountability, transparency and long-term shareholder value”.
Danone said it is now contemplating whether to support the consent solicitation to replace Lifeway’s entire board.
Lifeway, mainly known for kefir, also produces cheeses and a ProBugs line for children.
Its dairy products are distributed across the US, Mexico, Ireland, South Africa, France and the UAE.
In its statement yesterday (18 September), the company highlighted 22 straight quarters of growth, pointing to second-quarter net sales of $53.9m, up 18% year-over-year on a comparable basis.
Over the first two months of Q3, Lifeway saw a 20% growth in unaudited net sales, totalling $39.1m, it added.
