Sysco, U.S. Foods agree to merge

12/09/2013 10:56:00 AM
Coral Beach

Sysco Corp. and U.S. Foods are merging, with the $8.2 billion transaction set to close in the third quarter of 2014. Sysco’s president Bill DeLaney will lead the combined company, which will continue to be known as Sysco.

Company officials expect the deal to close in the third quarter of 2014, according to a joint news release issued Dec. 9. Houston-based Sysco will pay about $3.5 billion for the equity of Rosemont, Ill.-based U.S. Foods. Sysco is also assuming another $4.7 billion in net debt from U.S. Foods.

“Sysco will establish a team comprising members of both companies to prepare for and oversee a comprehensive integration for employees, customers and suppliers,” officials said in the release.

After the transaction, equity holders of U.S. foods will own about 13% of Sysco’s shares. Although DeLaney will be president and chief executive officer of the combine company, representatives from each of U.S. Foods’ majority stockholders will join Sysco’s board, according to the news release.

Officials predict the combined companies will have annual sales of about $65 billion and generate operating cash flow of about $2 billion.

“Sysco and U.S. Foods have highly complementary core strengths including a broad product portfolio and passionate food people deeply committed to customer service, quality-assured products and safety,” Delaney said in the release.



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Fred Marsh    
NYC  |  February, 13, 2014 at 03:23 PM

How is this a benefit to the average restaurant? As a matter of fact it is a warning that Sysco will attempt to buy, own and control the industry, leaving few options to the average business. By taking US Food, they will put in their pocket the difficult segments which Sysco has failed at in the past. These are healthcare (hospitals, retirement homes ) Schools (all food programs in private and public schools) and national accounts, which are chain accounts with multi units. Also there are many ares where there the only 2 distributors are US Food and Sysco, this would make Sysco the only option and allow them to set the prices at a high level. This is not a good sale for anyone.

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