For Danone’s long-running courtship of kefir category leader Lifeway, the third time isn’t the charm.
The French dairy giant has withdrawn its interest in purchasing the kefir category leader, according to a Wednesday filing with the U.S. Securities and Exchange Commission (SEC). Danone – which holds a 23% stake in Lifeway – is now exploring other options for its investment in the company.
“As part of our review, we may in the future take such actions with respect to our investment in Lifeway as we deem appropriate, including, without limitation, selling all or part of our investment in Lifeway,” reads the filing.
Following the news, Lifeway shares fell 23% to $25.90 on Thursday morning. Danone stock dipped 1%.
Last month, the two companies entered into a confidentiality agreement to facilitate due diligence for a potential purchase. The move came after Lifeway rejected two “unsolicited” proposed purchase offers from Danone in 2024 as undervalued.
The French dairy giant opted against another bid for the kefir maker “because it doesn’t believe the two businesses would be able to work together effectively,” a source familiar with the matter told Barron’s.
The news comes amid a fermenting family feud between current Lifeway CEO Julie Smolyanski and her mother and brother, Ludmila and Edward Smolyanski, who are seeking to force her termination as top executive.
Ludmila and Edward were fired from the company in 2022 but retain a stake. In August 2024, the duo filed a consent-statement solicitation with the SEC seeking to replace Lifeway’s board of directors. The solicitation was originally slated to close last month, but remains open.
As part of Danone’s review of alternatives for its investment in Lifeway, the company is reviewing whether to vote its shares of common stock in favor of the pending consent-statement solicitation. It has “not yet made a final decision,” per Wednesday’s SEC filing.
Meanwhile, in a statement released today, Lifeway said it remains committed to driving value for shareholders by continuing to explore “value-enhancing opportunities.”
“With the distraction of Danone’s unsolicited proposal now behind us, we will continue to focus on executing our growth strategy to create value for shareholders, employees, partners and customers,” reads the statement.