Two of America’s largest dairy processors are to merge in a deal worth $2.5 billion (E2.8b).
Dean Foods and Suiza Foods are to come together under the Dean Foods name to create a national dairy and speciality foods com- pany with a turnover of E11 billion. The new entity’s headquarters will be in Dallas.
Under the terms of the agreement, current Suiza shareholders will own 65% of the company with Dean Foods’ shareholders holding the remaining 35%. The board of directors will consist of the existing ten Suiza members and five members to be elected by Dean Foods.
The combined business hopes to achieve annual cost savings of E133 million in its first three years by weeding out duplicate functions.
Suiza chairman and chief executive officer Gregg Engles said: