One of US dairy’s most publicized acquisition quests could be reaching a crescendo this fall.
Lifeway Foods, Inc. is back at the negotiating table with Danone North America – with major changes to the kefir company’s ownership or governance at stake.
Almost a year ago, Danone proposed to fully acquire the functional dairy brand - in which it has a minority share - but was twice turned down by the company’s board, who deemed the dairy major’s valuation insufficient.
A sale remained a possibility, however - and in a SEC filing seen by us, Danone explains that Lifeway reached out in late June 2025 to ‘reset’ the relationship and restart negotiations.
But this time, Danone has taken additional steps to control the process - having had to field a very public fall-out from its previous unsuccessful attempts to buy the kefir brand’s remaining shares.
Specifically, on August 1, 2025, Danone and Lifeway signed a non-disclosure agreement (NDA) “to facilitate Danone’s further review of a potential acquisition transaction”.
The NDA runs to September 15, 2025 - a deadline that could be extended by a week if the two parties are still talking ‘in good faith’ - but if an agreement has not been reached thereafter, Danone says it would back Edward Smolyansky’s plan to replace Lifeway’s board through a consent solicitation.
The NDA also restricts Danone from making new public offers for the kefir business; initiate stockholder proposals; solicit proxies; nominate or attempt to remove any person from Lifeway’s Board, or participate in any consent solicitation in a manner that is not recommended by the Lifeway board.
“At present, Danone intends to further explore an acquisition transaction with Lifeway, but there is no guarantee that Danone or Lifeway will continue to pursue such a transaction or that any definitive agreement providing for a transaction will be entered into,” the SEC filing reads.
Timeline
September 23, 2024: Danone submits a bid of around $283m ($25.00 per share in cash) for Lifeway Foods, Inc's outstanding shares. Edward Smolyansky, who supported the transaction, said the offer represented 'a substanial premium over Lifeway's recent share price'.
November 5, 2024: Lifeway's board rejects the bid as 'opportunistic'.
November 15, 2024: Danone North America puts in a revised proposal of around $307m ($27.00 per share in cash).
November 26, 2024: Lifeway turns down Danone's second bid, stating that the offer implies 'a very low multiple of around 7-8.5 times this expected EBITDA range'.
Would Lifeway agree to sell?
In Q2 2025, Lifeway Foods outperformed analyst expectations with an EPS surprise of 3.7% and a revenue surprise of 7.8%.
The company’s revenue increased 18% to $53.9m with a volume-led growth, with EPS $0.28, up from $0.26 vs YA. Gross profit margin increased by 160bps YoY, a 28.6% increase; and net income rose to $4.2m versus $3.8m vs YA. The company aims for $45m-50m in adjusted EBITDA by fiscal year 2027.
Julie Smolyansky, president and CEO of Lifeway Foods, told investors that the performance was down to “branded volume growth, manufacturing efficiencies and favorable conventional milk pricing, partially offset by higher organic milk costs and planned trade investments to support distribution and innovation”.
Notably, the company launched a new range of collagen-fortified probiotic kefir.
“Collagen is a perfect example of our ability to lead emerging wellness trends,” Smolyansky said. “Lifeway was first in the category to combine probiotics and collagen in our probiotic smoothies with collagen. This innovation tapped into our dual consumer priorities of gut health and beauty from within. Our Berry Blast was recently named a 2025 Good Housekeeping Snack Award winner, and the entire line is resonating strongly with consumers.”
The chief executive said the company was resonating with growing consumer markets such as females aged 16-24 and 35+ and its sponsorship of NASCAR driver Josh Balicki has put the brand ‘in front of millions of viewers’ while also linking it with athletic performance.
“This is how we make Lifeway not just a brand in the dairy aisle, but a lifestyle icon in the public consciousness,” the CEO said.
Lifeway’s distribution is also expanding, Smolyansky explained. “Target is adding over 1,100 new 32 ounce kefir placements. Publix is launching new eight ounce items and Whole Foods, BJ’s, Costco, Amazon Fresh, Ingalls and Kroger divisions are expanding their LifeWay sets. Farmer Cheese is gaining distribution in H E V, Hy Vee, Albertsons and Lowe’s food. We recently began shipping eight ounce Kefir 12 packs to over 60 Costco locations in San Diego, a key step towards national club expansion,” she told investors.
“Lifeway is operating from a position of strength, leading the category, expanding our platform, building cultural relevance and scaling profitability. We see significant runway ahead as more consumers embrace gut health, functional nutrition and the benefits of probiotics.”
Julie Smolyansky, CEO, Lifeway Foods, Inc.
“This was another defining quarter for our business and our momentum is only building.
“We are executing with discipline, innovating with purpose and expanding our reach to bring Lifeway to more people in more places than ever before.”
As the clock ticks down to September 15 - and possibly, September 22, if the NDA is extended - it remains to be seen if Danone’s valuation of the kefir company would this time match that of Lifeway’s leadership.
