Danone has officially abandoned its pursuit of acquiring Lifeway Foods and is now exploring alternative strategies for its investment in the US kefir manufacturer.
Last month, Danone and Lifeway signed a non-disclosure agreement (NDA). This allowed the French multinational to assess the feasibility of a new bid, following two previous offers that were turned down by Lifeway.
According to an SEC filing dated yesterday (18 September), Danone has decided against making a new bid and is considering alternatives, including the possibility of “selling all or part” of its approximate 22.7% stake in Lifeway.
In a response, Lifeway released a statement reaffirming its commitment to delivering value for shareholders by executing its strategic plan and exploring value-enhancing opportunities.
The company has established a strategic review committee comprising independent directors to supervise this process and has engaged “extensively” with Danone.
Initially, the Activia brand owner proposed acquiring Lifeway in September 2024 for $25 per share, subsequently raising the offer to $27 two months later.
Lifeway rejected both proposals, maintaining that they significantly undervalued the company.
The situation escalated when Danone filed a lawsuit, alleging that Lifeway breached a shareholder agreement. In return, Lifeway characterized Danone’s offers as a “hostile takeover.”
Simultaneously, a protracted family dispute within Lifeway has intensified. Chair and CEO Julie Smolyansky now faces opposition from her mother and brother, Ludmila and Edward Smolyansky.
In July, the mother-son duo, who are Lifeway’s largest shareholders, submitted a “definitive consent statement” to the SEC, seeking to replace Lifeway’s board, including Julie, with nominees dedicated to restoring accountability, transparency, and long-term shareholder value.
Danone is now contemplating whether to support the consent solicitation aimed at replacing Lifeway’s entire board.
While Lifeway is primarily recognized for its kefir, the company also produces cheeses and a ProBugs line tailored for children.
The company’s dairy products are distributed in the US, Mexico, Ireland, South Africa, France, and the UAE.
In its recent statement (18 September), Lifeway emphasized that it has achieved 22 consecutive quarters of growth, reporting second-quarter net sales of $53.9 million—a year-over-year increase of 18% on a comparable basis.
Furthermore, during the first two months of Q3, Lifeway reported a 20% growth in unaudited net sales, totaling $39.1 million.