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Meadow Gold parent buys rival

Suiza Foods Corp., the largest U.S. milk producer and owner of Hawai'i's Meadow Gold Dairies, agreed to pay about $2.5 billion for rival Dean Foods Co., which put itself up for sale.

Suiza will pay Dean Foods shareholders $40.92 in cash and stock, a 26 percent premium to its closing price yesterday, the companies said in a statement. Suiza also will assume $1 billion in debt.

Since entering the milk business in 1993, Suiza has bought more than 80 plants, helping to boost sales 67 percent in the past five years. In 1999 it bought Southern Foods Group, parent of Meadow Gold Dairies in Hawai'i.

Suiza and Dean Foods together would have about $10 billion in annual sales and 35 percent of the U.S. milk market, likely drawing antitrust scrutiny, legal analysts said.