Danone has officially withdrawn its proposal to acquire Lifeway Foods, a player in the US kefir and probiotic beverage market.

The dairy giant first made a non-binding proposal to acquire Lifeway back in September last year (2024).

This decision marks a critical juncture for both companies as Danone reassesses its strategic direction and Lifeway reaffirms its commitment to independent growth.

The withdrawal follows extensive discussions between the two companies, during which Lifeway's Board formed a strategic review committee of independent directors to evaluate the acquisition proposal.

Ultimately, Danone concluded that a partnership might not be feasible at this time, prompting the dairy giant to refocus its efforts on its existing brand portfolio.

Lifeway's management expressed confidence in their growth strategy, stating: “We remain firmly committed to driving value for Lifeway shareholders by executing our strategic plan and continuing to explore value-enhancing opportunities”.

The statement continued: "With the distraction of Danone's unsolicited proposal now behind us, we will continue to focus on executing our growth strategy to create value for all our shareholders, employees, partners and customers".

Lifeway's highlighted that its recent financial performance underscores its strong market position. The company reported record net sales of $53.9 million for the second quarter of 2025, reflecting an 18% year-over-year increase.

This upward trend has continued into Q3, with $39.1 million in unaudited net sales recorded in the first two months, representing a 20% increase compared to the previous year. Lifeway has achieved 22 consecutive quarters of growth, solidifying its reputation as an innovator within the retail dairy sector.

Danone's decision to step back from acquisition talks reveals a shift in its investment strategy regarding its 23% stake in Lifeway.

The company's reassessment indicates that the potential benefits of acquiring Lifeway may no longer align with its current objectives, particularly given Lifeway's robust performance and strategic independence.

As Lifeway moves forward, it will continue to leverage its established brand in the probiotic beverage market while exploring new avenues for innovation and expansion.

The withdrawal also highlights ongoing governance challenges within Lifeway. The company has faced internal pressures from family members of CEO Julie Smolyansky, who have called for her removal and criticised the board for governance failures.

These dynamics could influence Lifeway's strategic direction as it seeks to maintain its growth trajectory and shareholder confidence.