Danone is selling its stake in Lifeway Foods, closing out a fractious relationship with the US kefir maker that spans nearly three decades. The French company invested in Lifeway in 1999 and has held roughly 22.7% of the business until now.
In a secondary public offering priced at $19.50 per share, Danone is selling 3,454,756 Lifeway shares. The offering was expected to close on 19 May, with Lifeway retaining no proceeds. Lifeway agreed to repurchase about $5 million worth of the shares at the same price, contingent on the offering closing.
Why Danone walked away
Danone made two takeover offers for Lifeway in 2024, one at $25 per share and another at $27, according to Lifeway's public statements. The kefir maker rejected both bids as undervalued and characterized them as hostile takeover attempts. After those rejections, Danone signaled it would explore selling its stake rather than push for a third offer.
The relationship deteriorated further in March 2024 when Danone filed legal proceedings against Lifeway over a decision to award CEO Julie Smolyansky shares in the business. Lifeway said it planned to file a counterclaim. By August 2024, the two sides had begun discussions about resetting the relationship and exploring a potential acquisition, but by September, Danone said it would not table another offer.
Board tensions and family feuds
Lifeway's governance has been complicated by a parallel family dispute among its largest shareholders. Julie Smolyansky, the CEO, has been at odds with her mother Ludmila and brother Edward Smolyansky, who hold the largest shareholding. In December, Edward Smolyansky accused the company of "blatant deception" during a governance dispute ahead of the annual meeting.
In October 2024, Danone and Lifeway struck a cooperation agreement. Lifeway agreed to refresh its board and separate the chair and CEO roles. The companies also agreed to stay litigation between them. In return, Danone committed not to support any board replacement effort through the end of June 2025.
Financial momentum at Lifeway
Despite the turmoil, Lifeway's financials have strengthened. In 2025, net sales reached $212.4 million, up 13.7% year on year. Operating income climbed 16.7% to $16.1 million, and net income grew 53.6% to $13.8 million. In the first quarter of 2026, the company accelerated further, with net sales jumping 36.7% to $63 million. Operating income surged to $6.32 million from $1.57 million in the year-earlier quarter, and net income rose 32% to $4.6 million.