DALLAS – Suiza Foods Corporation and Dean Foods Company are merging to form a national dairy and specialty foods company with $10 billion in revenue.
Upon closing, the merged company will carry the Dean Foods name and will be headquartered in Dallas. Howard Dean, chairman and chief executive officer of Dean Foods, will serve as chairman of the board of the merged company. Gregg Engles, chairman and CEO of Suiza Foods, will be CEO of the merged company, and will assume the chairman’s role upon Dean’s retirement.
The transaction has received the unanimous approval of both companies’ boards of directors and is expected to close in the third quarter of 2001.
Under the terms of the agreement, Dean Foods shareholders will receive total consideration of $40.92 per common share, consisting of $21 in cash and 0.429 shares of Suiza common stock. Suiza will also assume $1.0 billion of debt.
Upon completion of the transaction, there will be approximately 43 million basic shares of the new Dean Foods Company stock outstanding, with current Suiza shareholders owning approximately 65 percent of the company and Dean Foods shareholders holding approximately 35 percent.
The new Dean Foods board of directors will consist of the existing 10 Suiza members and five members to be nominated by Dean Foods.
Repurchase DFA interest.
In connection with the transaction, Suiza will repurchase the 33.8 percent stake in Suiza Dairy Group that is owned by the Dairy Farmers of America for approximately $165 million in cash and the operations of six plants located in five states where Suiza and Dean Foods overlap.
Plant names and locations include: Barber, Birmingham, Ala.; Velda, Miami, Fla.; Velda, Winter Haven, Fla.; H. Meyer, Cincinnati, Ohio; Coburg, N. Charleston, S.C.; Cream O Weber, Salt Lake City, Utah.