Danone’s Dramatic Shift: The End of the Lifeway Foods Acquisition Saga

Danone has decided to pull back from its bid to buy Lifeway Foods, an American kefir maker. However, the French company is still considering supporting a proposal to change Lifeway’s entire board of directors.

In a recent filing with the Securities and Exchange Commission (SEC), Danone stated, “During our review of Lifeway, we couldn’t confirm our previous proposal to acquire the company. On September 17, we made the decision to stop pursuing the acquisition and informed Lifeway.”

Last year, Lifeway faced internal strife, with family disputes threatening its stability. Danone, which owns about 25% of Lifeway, initially offered $25 per share, valuing the company at roughly $318 million. After this offer was rejected, Danone returned in November with an increased offer of $27 per share.

The buyout could have resolved the leadership conflict at Lifeway, where CEO Julie Smolyansky is at odds with her mother, Ludmila, and her brother, Edward. Both Ludmila and Edward control the majority of Lifeway’s shares and want to remove Julie from her position.

In its SEC filing, Danone mentioned, “We are reviewing alternatives regarding our investment in Lifeway. We’re also considering voting our shares in support of Edward Smolyansky’s proposal to replace the board.”

Danone emphasized that it might take various actions related to its investment in Lifeway, including selling shares or holding onto them longer.

As of now, Danone owns 3,454,756 shares of Lifeway common stock, representing about 23% of the company. This investment has been held for several years. According to a 2023 survey, nearly 72% of investors believe corporate governance impacts long-term shareholder returns, highlighting the importance of board representation in companies like Lifeway.

Overall, this situation reflects ongoing challenges in corporate governance, especially when family dynamics are involved. The outcome could significantly shape Lifeway’s future and influence market perceptions of the company.



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