Dairy giants Suiza Foods and Dean Foods to merge

Nation's Restaurant News, April 23, 2001

DALLAS -- In a deal that will merge the two largest dairy processors in the country, Suiza Foods Corp., based here, agreed to acquire Franklin Park, Ill.- based Dean Foods Co.

Suiza will pay an estimated $1.5 billion in stock and cash and will assume nearly $1 billion in debt. If the merger is completed, the new company will operate under the Dean Foods name, make its headquarters in Dallas and generate annual sales of about $10 billion.

The new entity would employ about 30,000 in 39 states and control about 30 percent of the U.S. fluid milk market.

Howard Dean, 64, Dean's chief executive and grandson of the founder, will serve as chairman of the new entity, while Gregg Engles, 43, Suiza's chairman and chief executive, will hold the post of chief executive. He will assume the chairman's title when Dean retires.

In a prepared statement, Engles said: "The merger is an important step in delivering on our ongoing growth strategy and positioning us for the future.

"By combining with Dean Foods, we will also generate greater efficiencies and scale to invest in innovation and growth. This opportunity should translate into increased consumption -- a benefit for the entire industry, from dairy farmers to consumers."

The new company is expected to generate annual synergies of $60 million in the first full year after merging and $120 million by the close of the third year.

The 75-year-old Dean Foods processes and distributes milk, ice cream and other products, including salad dressings and pickles. Suiza Foods processes all products under the Suiza brand, including International Delight, Sun Soy and Second Nature.