Danone Divests Its Stake in Lifeway Foods for $67.4 Million
Danone has finalized the sale of its 23% stake in Lifeway Foods, a leading U.S. kefir manufacturer, for $67.4 million. This move concludes a contentious relationship marked by failed acquisition bids and legal disputes. Danone's initial investment in Lifeway dates back to 1999, when it acquired a 15% stake for $6.5 million. However, recent years have seen growing tensions, with Danone's takeover offers of approximately $283 million and $307 million being rejected by Lifeway.
The friction between the two companies intensified as Lifeway accused Danone of undervaluing the business and attempting to influence its leadership. Danone, in turn, pursued legal action over CEO compensation that it had not sanctioned. Despite these challenges, Lifeway has reported significant financial growth, with its FY25 net sales reaching record highs and Q1 2026 sales increasing by 36.7% year-on-year to $63 million, alongside a rise in net income to $4.7 million.
The ongoing legal and corporate disputes also had financial repercussions on Lifeway, with administrative costs seeing an uptick of over $2 million in 2025 due to mounting legal expenses. The eventual dissolution of the partnership with Danone was seen as a relief from these financial burdens.
For Danone, exiting the kefir business comes as it turns its focus towards other ventures in gut health. The company has made strategic investments in brands such as Activia and has acquired The Akkermansia Company, Kate Farms, and Huel to bolster its portfolio of science-based, functional nutrition products.
Timeline of Events
- September 2024: Danone launches a $283 million takeover bid for Lifeway, offering $25 per share.
- November 2024: Lifeway rejects the initial bid, prompting Danone to make an improved $307 million offer, which is also declined.
- March 2025: Danone files a lawsuit against Lifeway for alleged breaches of the shareholder agreement.
- Summer 2025: Tensions rise as shareholders push for leadership changes at Lifeway, with Danone's support.
- October 2025: A cooperation agreement is signed, pausing lawsuits and setting the stage for Danone’s exit.
- May 2026: Danone sells its stake for $67.4 million, officially ending its relationship with Lifeway.
