UPDATE 1-Dean Foods to settle Tennessee farmer lawsuit

July 12 Tue Jul 12, 2011 6:36pm EDT

July 12 (Reuters) - Dean Foods Co (DF.N) has agreed to settle a class action lawsuit brought by dairy farmers in Southeastern states for $140 million.

The U.S. dairy company will pay the amount over 4 to 5 years into a fund that will be distributed to the dairy farmers.

It will make an initial payment of $60 million upon preliminary approval by the United States District Court for the Eastern District of Tennessee and subsequent payments of $20 million in each of the following four years.

Dean Foods expects to take a charge in the second quarter on the settlement, but does not expect it to materially impact results. (Reporting by A. Ananthalakshmi in Bangalore; editing by Andre Grenon) (ananthalakshmi.as@thomsonreuters.com; within US +1 646 223 8780; outside U.S +91 80 4135 5800; Reuters Messaging: ananthalakshmi.as.reuters.com@reuters.net)