MORTON GROVE, ILL. — The back-and-forth disputing between fermented dairy manufacturer Lifeway Foods, Inc. and Danone North America PBC continued March 4, with Lifeway describing Danone’s latest action – filing a lawsuit – as a tactic in Danone's “campaign to execute a hostile takeover of Lifeway at a price that substantially undervalues the company.”

Lifeway and its board of directors have spent the past several months thwarting offers from Danone to acquire all outstanding shares of the company, including a vetoed offer of approximately $306.7 million.

A new Schedule 13D filing with the Securities and Exchange Commission (SEC) includes reference to Danone on March 3 filing in Cook County, Illinois, a lawsuit against Lifeway, its board of directors and chief executive officer Julie Smolyansky.

As detailed in the SEC document: “The lawsuit alleges that [Lifeway’s] directors breached their fiduciary duty of loyalty by choosing to enrich Ms. Smolyansky and entrench themselves as directors by knowingly approving the Smolyansky share issuance in violation of the shareholder agreement.  The lawsuit also alleges that [Lifeway] and Ms. Smolyansky committed a breach of contract by violating the shareholder agreement through [Lifeway issuing 283,337 shares of its common stock to Ms. Smolyansky] (and, in the alternative, that their conduct was barred by promissory estoppel).”

Lifeway on March 4 stated in response: “Danone is choosing to exploit its vast corporate power to bully Lifeway's board and its shareholders into accepting an undervalued transaction rather than negotiating with the company in good faith. Lifeway's board remains committed to maximizing the value for all shareholders and will not be pressured into a transaction that fails to do that.”

The kefir maker also stated that it plans to file a counterclaim against Danone and “will aggressively contest Danone's claims.”

A global press relations representative at Danone said the company had no further comments on the matter at this time.

Since Danone invested in Lifeway in 1999, Lifeway said Danone “has repeatedly leveraged the 1999 stockholders' agreement, which [Lifeway] believes is invalid, to benefit itself at the expense of Lifeway shareholders. Among other things, Danone has refused to grant market-level equity compensation to executives for over 20 years. For much of that period, Danone has been able to compete with Lifeway with impunity, including directly after Danone acquired Wallaby Yogurt as part of its acquisition of White Wave Foods. Danone has also effectively chilled potential value enhancing acquisitions, by virtue of its purported ability to acquire additional shares for $10, which benefits only Danone.”

Per Lifeway, it posted gross sales of $4,543,297 for the last week of February 2025, a 17% increase over its $3,880,625 gross sales during the same period in 2024.

The release sent out by Lifeway March 4 also stated: “No amount of corporate bullying will deter Lifeway from remaining steadfast in safeguarding the interests of our shareholders and other stakeholders.”