Danone sells entire Lifeway Foods stake after failed takeover attempts, legal disputes
Danone has exited Lifeway Foods by selling its entire 22.7% stake, ending a long-standing partnership marked by failed takeover bids and governance disputes.
USA – French dairy company Danone has agreed to sell its entire stake in US kefir producer Lifeway Foods, ending a partnership that began more than two decades ago and was recently overshadowed by failed acquisition attempts and legal disputes.
Danone, which first invested in Lifeway in 1999, held approximately 22.7% of the company before the divestment. The move follows months of strained relations between the two businesses after Lifeway rejected multiple takeover proposals from the French dairy group in 2024.
In a statement released on May 14, Lifeway confirmed that Danone had priced a secondary underwritten public offering of 3.45 million shares at US$19.50 per share. Lifeway noted that the offering consists entirely of shares sold by Danone, meaning the company will not receive any proceeds from the transaction.
However, Lifeway stated that it has agreed to repurchase approximately $5 million worth of shares at the same offering price, subject to completion of the transaction.
The sale formally ends Danone’s efforts to acquire the kefir maker after two takeover proposals were rejected last year.
Danone initially offered US$25 per share before increasing its bid to US$27 per share, but Lifeway’s board argued that both proposals undervalued the company and described the approach as a “hostile takeover.”
Relations deteriorated further in March 2025 when Danone initiated legal action concerning Lifeway’s decision to award shares to Chief Executive Officer Julie Smolyansky. Lifeway later announced plans to file a counterclaim against Danone.
Despite the tensions, both companies attempted to rebuild relations later in 2025. In August, representatives entered discussions aimed at resetting their relationship and revisiting the possibility of an acquisition.
However, by September, Danone confirmed it would not submit another offer and began exploring alternatives for its minority holding, including a potential sale.
Operationally, Lifeway has continued to report strong financial growth. The company posted 2025 net sales of US$212.4 million, representing a 13.7% year-on-year increase. Operating income rose 16.7% to US$16.1 million, while net income climbed 53.6% to US$13.8 million.
Growth momentum continued into the first quarter of 2026, with net sales increasing 36.7% to US$63 million. Operating income surged from US$1.57 million to US$6.32 million, while net income rose 32% to US$4.6 million.
Commenting on the divestment, a Danone spokesperson said: “Following extensive discussions with Lifeway Foods, and having explored all options regarding our existing holding, we decided not to pursue the acquisition of the company. We have now entered into an agreement to sell our stake in Lifeway Foods.”
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