Foodservice Equipment Reports

Sysco-US Foods Deal Kaput

Days after the U.S. District Court for the District of Columbia granted the Federal Trade Commission’s request for a preliminary injunction to block the proposed $3.5 billion Sysco Corp.-US Foods merger, Sysco terminated the merger agreement. The action also terminated an agreement with Performance Food Group to purchase US Foods facilities in 11 markets. Under the terms of the merger agreement, Sysco will pay breakup fees of $300 million to US Foods and $12.5 million to PFG.

“After reviewing our options, including whether to appeal the Court’s decision, we have concluded that it’s in the best interests of all our stakeholders to move on,” said Sysco President/CEO Bill DeLaney.

Regulators had raised concerns about a foodservice distribution monopoly when Sysco first announced the deal in late 2013. The FTC filed a lawsuit earlier this year, claiming the deal would have given the combined company 75% of the national market for distribution services, tilting pricing power too heavily in its favor and hurting smaller distributors and customers including restaurants, hospitals, hotels and schools.

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