Lifeway Foods and Danone Reach Cooperation Agreement Amidst Board Reshuffle

Lifeway Foods, a prominent kefir producer, has entered a cooperation deal with Danone, a minority shareholder, bringing a breath of fresh air to a relationship marked by recent tensions. These tensions arose after Lifeway rejected Danone's two takeover bids, leading to mutual litigation.

Over the summer, representatives fr om both companies began discussions to mend their relationship and consider potential acquisition opportunities. Yet, last month, Danone decided against further offers and considered selling its 22.7% stake. Meanwhile, Lifeway's largest shareholder, Ms. Julie Smolyansky, has been at the center of a drive to reshape the company’s board.

The new agreement, announced on September 30, outlines significant governance changes, including the appointment of four new directors and the separation of the roles of chair and CEO by month's end. Notably, the companies have agreed to pause their ongoing litigation, which stemmed from a contentious share award to Ms. Smolyansky.

Danone, owner of brands like Actimel, has conceded certain rights, choosing not to replace Lifeway’s board before June next year. Instead, three new independent directors will join the board, unaffiliated with either Danone or the Smolyanskys.

This development follows an internal family rift, wh ere Ludmila and Edward Smolyansky criticized Julie's management and sought to replace the board with nominees committed to transparency and long-term value.

As Lifeway embarks on this 'next chapter of growth,' Ms. Smolyansky asserts the company's dedication to resilience and innovation, aiming to deliver probiotic-rich foods while enhancing shareholder value.