Is Milk Giant Dean Foods Ripe for Takeover?

Dean Foods is an American food and beverage company and the largest dairy company in the United States. ( Farm Journal )

(Bloomberg) -- The largest U.S. milk bottler may be a takeover candidate, according to Deutsche Bank.

Shares of Dean Foods Co. have tumbled more than 50 percent in the past 12 months as the company battles a long-term decline in U.S. milk consumption and competition from new plants. The Dallas-based processor has garnered interest from global dairy players in the past, Deutsche Bank analysts including Rob Dickerson said in a note dated Monday. More recently, activist Swiss firm VV Value Vals AG has taken a 10 percent position in the shares and said it may seek talks with management.

“We do believe such scarce dairy processing assets in the U.S. could be an interesting strategic target for a number of potential acquirers,” the bank said. The analysts issued a hold rating on the stock.

Dean Foods declined to comment on the prospect that it may be targeted by an acquirer. The shares closed up 3.5 percent at $8.69 on Wednesday.

Earlier this year, the company announced plans to cut $150 million in annual expenses by 2020 through manufacturing capacity consolidation and other measures.


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