Michael Foods, Mexico’s Grupo Lala eye Dean Foods Co's Morningstar unit: report

Dean Foods Co's warehouse business division Morningstar has attracted takeover interest from Michael Foods and Mexican dairy company Grupo Lala, in a deal that could be valued in the $1 billion to $1.5 billion range, Reuters yesterday reported, citing people familiar with the matter.

Private equity firms including Apollo Global Management are also in the race for Morningstar, the report added.

Dallas, Texas-based Dean Foods, which operates three divisions - Fresh Dairy Direct, WhiteWave and Morningstar - had announced in September that it has decided to explore a transaction that may result in the sale of the Morningstar business.

Morningstar is a leading warehouse delivery dairy business that produces and sells traditional and specialty items, including cultured dairy products, ice cream mixes, coffee creamers, aerosol whipped toppings, traditional and value-added milks, and blended iced beverages to retailers and food-service providers nationwide.

Morningstar generated sales of $1.3 billion in 2011, or 10 per cent of Dean Foods' total revenue of $13.05 billion.

Dean Foods is a leading food and beverage company in the US and a European leader in branded plant-based foods and beverages.