Dean Foods Company and Land O’Lakes, Inc. announced today that Dean Foods will purchase Land O’Lakes Upper Midwest fluid milk operations. The two organizations also announced their agreement to form a joint venture to market and license certain value-added fluid and cultured dairy products to further expand and leverage the LAND O LAKES brand name nationwide.
Both agreements will include long-term licensing arrangements for use of the LAND O LAKES brand name. It is anticipated that the transactions will close, subject to regulatory review, on or about July 1, 2000. Terms of the transactions were not disclosed.
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Land O’Lakes, a producer-owned cooperative based in Arden Hills, Minnesota, is one of the nation’s premier food and agricultural companies. Dean Foods, headquartered in Franklin Park, Illinois, is one of the nation’s leading processors and distributors of regionally branded and private-label dairy products.
The asset purchase encompasses all the operating assets of Land O’Lakes Fluid Dairy Division, including four fluid dairy plants located in Woodbury (Twin Cities area) and Thief River Falls, Minn., Bismarck, N.D. and Sioux Falls, S.D., as well as a new extended-shelf-life (ESL) dairy and cultured plant located in Richland Center, Wis.
The acquired dairy division generates annual sales of approximately $310 million and markets a full line of fluid milk, yogurt, creams, sour cream and cottage cheese, 85% of which is sold under the LAND O LAKES brand name. Land O’Lakes will be the long-term agent for supplying the raw milk requirements of the plants being acquired by Dean Foods.
Under the separate joint venture agreement, Land O’Lakes and Dean Foods will each hold a 50% interest in an independent entity having the U.S. rights to develop, market and license LAND O LAKES brand cream, half and half, sour cream and extended-shelf-life products, including the successful GRIP’N GO(TM) single-serve milk. The joint venture will bring to market innovative, functional-food dairy products in convenient packaging designed for the “on-the-go” lifestyles of today’s consumers.
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By GlobalData“The LAND O LAKES brand name and reputation for high-quality products has created this opportunity,” said Chris Policinski, Land O’Lakes executive vice president and chief operating officer of the Dairy Foods value-added group. “The joint venture allows us to extend the reach of our most innovative fluid dairy products, and we will use the proceeds from the sale to build and strengthen our core businesses on behalf of our members.”
“The acquisition of the Land O’Lakes fluid dairy operations is another key step in Dean’s long-term strategy of integrating strong regional dairies into a cost-efficient national dairy company, better able to serve the consolidating retail sector and the individual consumer,” stated Howard Dean, chairman and chief executive officer of Dean Foods. “In terms of geography, strategy, operations, R & D capabilities and organizational culture, it is hard to imagine a better fit between the two parties. Additionally, the joint venture will allow Dean and Land O’Lakes to work together closely to continue developing and marketing new, value-added dairy products under the highly respected LAND O LAKES brand.”
No significant changes are anticipated in plant operations, employment or the positioning of the LAND O LAKES brand name.
Land O’Lakes (www.landolakesinc.com) is a national farmer-owned food and agricultural cooperative, with sales approaching $6 billion. Land O’Lakes does business in all 50 states and more than 50 countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the U.S.; services its international customers with a variety of food and animal food ingredients; and provides farmers and local cooperatives with an extensive line of agricultural supplies (feed, seed, plant food and crop protection products) and services.
Dean Foods (www.deanfoods.com) is one of the nation’s leading dairy processors and distributors producing a full line of branded and private-label products, including fluid milk, ice cream and extended-shelf-life products, which are sold under the Dean Foods and other strong regional brand names. Dean Foods is the industry leader in other food products, including pickles, powdered non-dairy coffee creamers, aseptically packaged foodservice products, and refrigerated dips and salad dressings. Total Dean Foods’ sales are approximately $4 billion annually.
