Department Of Justice Sues Dean Foods Co.

The U.S. Department of Justice filed a lawsuit Friday in a Milwaukee federal court against Dean Foods Co. (NYSE: DF) on antitrust grounds in an attempt to reverse last year's acquisition of Foremost Farms USA's consumer products division.

"The acquisition eliminates one of Dean's most aggressive competitors--a competitor that engaged in pricing that Dean considered 'dangerous' and 'irrational,'" the department alleged in the lawsuit.

This is the first time that President Obama's antitrust team at the Justice Department has filed a lawsuit trying to block or undo an acquisition.

The antitrust division is headed by Christine Varney, who has stated that she will be looking into competition issues in the agricultural industry.

Antitrust regulators allege that the the deal greatly reduced competition in milk sales to schools, grocery stores and convenience stories in Illinois, Michigan and Wisconsin. State attorneys general from those states have joined the lawsuit.

A Dean Foods spokeswoman said that the lawsuit was "unsound, both legally and economically."

The spokeswoman went on to say, "We are anxious to have the opportunity to defend this pro-competitive transaction in court."