Dean Foods confirmed to Feedstuffs that it has reached a mutual decision with Dairy Farmers of America (DFA) to withdraw the $425 million agreement to become the stalking horse bidder for a substantial portion of Dean’s assets and business. However, a Dean Foods spokesperson said this does not mean that DFA has removed itself from the bidding process.

“Dean Foods simply believes that, by avoiding unnecessary litigation regarding procedure and bid protections for DFA, all parties involved, including DFA, will focus on developing competitive and value-maximizing bids,” the spokesperson told Feedstuffs.

The stalking horse deal would have included 44 of the company’s fluid and frozen facilities as well as the real estate, inventory, equipment and all other assets necessary to operate those facilities.

Dean Foods said it still anticipates that DFA will submit a bid by the court-imposed March 30 bid deadline.

“Dean Foods has had extensive discussions with all interested parties regarding this decision and has received broad support on this modified order. We are pleased to proceed to the next step of this process and look forward to a successful auction,” the company said.

A DFA spokesperson told Feedstuffs that it is “re-evaluating” its options, given current circumstances, to bid on Dean’s assets by the March 30 deadline.

“We believe any bid we submit will benefit all dairy farmers, as no one has a greater interest in preserving milk markets than we do,” the spokesperson said. “Ultimately, whether we end up with facilities or they are purchased by other parties, DFA remains committed to preserving milk markets for our members and limiting disruption to the industry.”