Foodservice Equipment Reports

Sysco/US Foods Merger Inches Closer?

The Sysco-US Foods deal might be closer to regulatory approval than we thought. Sysco, the country’s biggest food distributor, is closing in on a deal for the $3.5 billion merger. The key is divestiture, and the Houston firm is in advanced talks to sell some assets to Blackstone Group-owned Performance Food Group.

The Federal Trade Commission, which has been reviewing the merger, is expected to give the green light once Sysco strikes a deal to divest some of the assets. Still, the controversial merger—which combines the top two U.S. food distributors and creates a company with a quarter of the $235 billion North American market—is unlikely to close this year.

Last month, members of the Teamsters protested outside Sysco’s annual shareholder; they worry the combined company will cut routes and combine warehouses as they serve customers in the same markets. Rivals also fear that a combined Sysco-US Foods will undercut them on price.

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