Dean Foods Co. (DF) said it its seeking bidders for a Wisconsin milk plant it agreed to sell in a March settlement of an antitrust lawsuit brought by the U.S. Justice Department.
At the time, the nation's largest dairy processor said it agreed to settle the cases -- which were also brought by the attorneys general of Wisconsin, Illinois and Michigan -- to avoid the time and expense of fighting them.
The planned sale substantially unwinds Dean's 2009 purchase of Foremost Farms USA's consumer-products division and marks a victory for the Obama administration's Justice Department in its first effort to challenge a merger. The sale includes a 170,000 square-foot dairy processing facility and the Golden Guernsey and La Vaca Bonita brands.
The 2010 lawsuit said the Foremost Farms acquisition reduced competition in the sale of milk to schools and other buyers in Illinois, Michigan and Wisconsin. The case, part of a Justice Department effort to step up antitrust enforcement in the agricultural sector, involved four competitors shrinking to three.
Dean Foods in February reported swinging to a fourth-quarter loss on one-time charges and continuing woes at its dairy business. While the company reported signs of retail milk prices finally stabilizing, it offered little optimism for improved earnings in the first half of 2011 and projected full-year returns below analysts' expectations. Dean has been pummeled by heavy competition from private-label brands, as grocers discounted milk in an effort to lure consumers into their stores.
The company plans to release its first-quarter results May 10.
Shares were down 1.3% at $9.77 recently amid a broad market downturn. The stock is off 41% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com