Danone Sells Stake in Lifeway Foods Amidst Prolonged Dispute
Danone, the French multinational food company, has sold its 23% stake in Lifeway Foods for $67.4 million, concluding a contentious chapter in its dealings with the American kefir manufacturer. This move marks the end of a series of failed takeover attempts, legal skirmishes, and strategic disagreements that have characterized the relationship between the two companies.
Danone initially invested in Lifeway in 1999, purchasing a 15% stake for $6.5 million. However, as the years progressed, the relationship soured. Danone's attempts to acquire Lifeway outright were rebuffed; its bids of approximately $283 million and $307 million were rejected by Lifeway, which accused Danone of undervaluing the company and attempting to force managerial changes.
The disputes extended to legal battles, with Danone filing a lawsuit against Lifeway in March 2025 over alleged breaches of the shareholder agreement. The friction between the two entities resulted in increased administrative costs for Lifeway, which rose by more than $2 million in 2025 due to mounting legal fees.
Despite these challenges, Lifeway reported record net sales and increased profitability in fiscal year 2025. The company continued to build on this success in the first quarter of 2026, with a 36.7% increase in sales year-on-year, reaching $63 million, and a rise in net income to $4.7 million. CEO Julie Smolyansky attributed this growth to a robust demand for health-focused products and gut-health awareness.
For Danone, the decision to exit Lifeway aligns with its broader strategy of investing in its own gut health and functional nutrition brands. It has refreshed its Activia brand in North America and acquired companies such as The Akkermansia Company, Kate Farms, and Huel to strengthen its portfolio.
With Danone's stake sale finalized in May 2026, the separation concludes a tumultuous period. Both companies are now poised to pursue their individual strategic directions, with Lifeway focusing on capitalizing on consumer trends in health and wellness and Danone continuing to expand its presence in the functional beverage sector.
