The dairy co-operative will also assume Dean's liabilities as part of the deal to acquire 44 of the company's facilities, as well as other assets.

Dean filed for Chapter 11 bankruptcy in November as the business struggled to attract consumers who have instead turned to nondairy milk or private-label products. At the time it filed for bankruptcy, Dean had reported a net loss in seven of its last eight quarters.

The transaction makes the Dairy Farmers of America the stalking horse bidder, meaning that the transaction would be subject to receiving higher or better offers while the company is in bankruptcy.

The deal would also need approval from the Department of Justice, which has reportedly begun probing the merger, according to the Wall Street Journal.