Dallas company
buying parent of
Meadow Gold

The acquisition is part of a
plan to create a $6 billion
nationwide dairy company

By Russ Lynch
Star-Bulletin

The parent of Meadow Gold Dairies in Hawaii is being sold to Dallas-based Suiza Foods Corp., which is forming a $6 billion nationwide dairy company.

Suiza said today it is buying privately held Southern Foods Group L.P., also of Dallas, whose regional brands include Meadow Gold, Borden and Elsie. The purchase price was not disclosed. A Suiza spokeswoman said the deal should have no affect on the local operations.

Southern Foods bought Meadow Gold's Hawaii operations and 17 dairy companies on the mainland two years ago as part of the sale of Borden Inc. subsidiaries. The Hawaii operations at the time included milk processing plants in Honolulu and on the Big Island, and dairy farms in Waimanalo and on Kauai, with a total staff of nearly 300.

Pete Schenkel, president and chief executive officer of Southern Foods, said today there has been no change since then. "And there won't be," he said. "That's the beauty of this joint venture. There is no overlap."

Suiza is a prominent supplier in the north and northeast while Southern Foods has been in the south and the west, including Hawaii, he said.

When the companies are combined, which is expected to take place by the end of this year, they will form a joint venture, initially to be called Suiza Fluid Dairy Group, which will be 66.2 percent owned by Suiza and 33.8 percent owned by Dairy Farmers of America Inc. DFA is now a 50 percent partner in Southern Foods.

Schenkel will become president of Suiza's U.S. fluid milk operations and vice chairman of Suiza's board of directors.

Suiza Foods is the nation's biggest processor of fluid milk and Southern foods is the third-biggest, said Gregg Engles, Suiza chairman and CEO.