Danone has decided to pause litigation against Lifeway Foods and will vote in favor of the company’s board as part of a comprehensive agreement. This development follows Danone’s recent announcement that it was dropping its year-long attempt to acquire the kefir maker.
Earlier this year, Danone filed a lawsuit against Lifeway after objecting to the issuance of new shares to CEO Julie Smolyansky. Danone claimed that this action violated a longstanding agreement that required their consent. In response, Lifeway countersued, disputing the validity of Danone’s claims. Currently, Danone holds 22.7% of Lifeway’s stock.
The new agreement between the two companies includes a ceasefire on litigation related to this matter. Additionally, Lifeway has agreed to appoint four new independent directors who have no affiliation with Danone, Lifeway, or the Smolyansky family. These appointments are subject to Danone’s approval following a thorough review.
As part of the deal, two of Lifeway’s longest-serving board members will step down, and the company plans to separate the roles of chairman and CEO. Julie Smolyansky will continue as the CEO, while an independent director will eventually assume the chairman position.
Danone has also committed to voting in favor of Lifeway’s board of directors at the company’s 2025 and 2026 annual meetings. This comes amid a proposal from Lucy and Edward Smolyansky to remove the entire Lifeway board, including Julie.
“This agreement provides us with clarity and stability, allowing us to focus on delivering probiotic-rich foods to more families and creating value for our shareholders,” said Julie Smolyansky in a statement.
While Danone continues to evaluate its investment in Lifeway, including the possibility of selling its shares, the company declined to provide further comments beyond its Securities and Exchange Commission filing.
Last month, Danone announced that it was no longer pursuing an acquisition of Lifeway Foods. According to reports, Danone made this decision because it believed that the two companies would not be able to collaborate effectively.