DOJ approves WhiteWave merger under one major condition

DENVER — The U.S. Department of Justice has approved Danone’s acquisition of The WhiteWave Foods Co., under the condition that Danone divests of organic milk manufacturer Stonyfield Farms.

Danone announced on March 31 its plan to divest of Stonyfield Farms as a way to expedite its $12.5 billion acquisition of WhiteWave, which has a major operation in Broomfield.

Without the divestiture, the DOJ said that the acquisition would have reduced competition between the two leading brands in organic milk, potentially harming U.S. dairy farmers.

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In fact, the DOJ’s Antitrust Division went so far as to file a civil antitrust lawsuit on Monday blocking the proposed transaction, while also filing a proposed settlement to resolve concerns. That settlement required the divestment of Stonyfield Farms to an independent buyer, which would sever a strategic supply and licensing partnership between Danone and WhiteWave’s primary competitor, CROPP Cooperative. CROPP produces Organic Valley, one of three organic milk brands — along with Stonyfield and WhiteWave’s Horizon.

“The proposed acquisition would have blunted competition between the top two purchasers of raw organic milk in the northeast and the producers of the three leading brands of organic milk in the United States,” Brent Snyder, acting assistant attorney general of the Justice Department’s Antitrust Division, said in a prepared statement on Monday.  “Today’s proposed settlement will ensure competitive marketplaces for both farmers in the northeast that sell raw organic milk and consumers who purchase fluid organic milk in stores nationwide.”