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Indiana joins Feds in reviewing merger of Sysco, US Foods

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Sysco Corp.’s agreement to buy US Foods for $3.5 billion is being reviewed for its effect on competition by federal and regulators in some states, including Indiana..

Houston-based Sysco, with annual revenue of about $44 billion, is the top operator in the U.S. food distribution business. Adding No. 2 US Foods would create a corporation in charge of at least a quarter of the $235 billion North American market.

The companies’ deal, announced last month, will be reviewed by the Justice Department’s antitrust division or the U.S. Federal Trade Commission, said Gina Talamona, a Justice Department spokeswoman. A decision hasn’t been made about which agency will conduct the investigation, she said Thursday.

Indiana Attorney General Greg Zoeller also is looking at the deal, said Bryan Corbin, his spokesman.

“We are aware of the merger and are working with other states as we examine the potential impact in Indiana,” Corbin said. He declined to identify any other states involved or comment on details of the review.

In a prepared statement, Florida also said it was participating in a "multistate group that is currently reviewing this merger."

Sysco is already North America’s biggest distributor of food to restaurants. Rosemont, Ill.-based US Foods would add brands including Cattleman’s Selection meat and Devonshire desserts. The combined companies would have about $65 billion in annual sales.

In announcing their agreement to combine businesses, Sysco and closely-held US Foods said the merger would create a “world class foodservice company.”

US Foods operates a large distribution center in Fishers. Sysco has a large warehouse at 4000 W. 62nd St., in Indianapolis.

Sysco has obtained a $4.75 billion financing commitment from Goldman Sachs Group Inc. to fund the transaction. It’s paying $3 billion in common stock and $500 million in cash to US Food owners including private-equity firms KKR & Co. and Clayton, Dubilier & Rice LLC.

Charley Wilson, a spokesman for Houston-based Sysco, said in an e-mailed statement that the company knew the review was under way.

“We are aware that several states have asked to participate in the antitrust review process,” he said. “This is common practice in mergers involving companies that operate in several geographic areas.”

Sysco operates in a “highly competitive and fragmented space,” he said. Merging with US Foods will enable Sysco to take “meaningful cost” out of the system, making the company more competitive, he said.

Lisa Lecas and Michelle Calcagni, spokeswomen for US Foods, didn’t immediately respond after regular business hours to e-mail messages seeking comment on the review.

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  • jobs?
    How will this merger affect the local labor? Will it bring layoffs of drivers or warehouse employees?

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  1. I had read earlier this spring that Noodles & Co was going to open in the Fishers Marketplace (which is SR 37 and 131st St, not 141st St, just FYI). Any word on that? Also, do you happen to know what is being built in Carmel at Pennsylvania and Old Meridian? May just be an office building but I'm not sure.

  2. I'm sorry, but you are flat out wrong. There are few tracks in the world with the history of IMS and probably NO OTHER as widely known and recognized. I don't care what you think about the stat of Indy Car racing, these are pretty hard things to dispute.

  3. Also wondering if there is an update on the Brockway Pub-Danny Boy restaurant/taproom that was planned for the village as well?

  4. Why does the majority get to trample on the rights of the minority? You do realize that banning gay marriage does not rid the world of gay people, right? They are still going to be around and they are still going to continue to exist. The best way to get it all out of the spotlight? LEGALIZE IT! If gay marriage is legal, they will get to stop trying to push for it and you will get to stop seeing it all over the news. Why do Christians get to decide what is moral?? Why do you get to push your religion on others? How would legalizing gay marriage expose their lifestyle to your children? By the way, their lifestyle is going to continue whether gay marriage is legalized or not. It's been legal in Canada for quite a while now and they seem to be doing just fine. What about actual rules handed down by God? What about not working on Sundays? What about obeying your parents? What about adultery? These are in the 10 Commandments, the most important of God's rules. Yet they are all perfectly legal. What about divorce? Only God is allowed to dissolve a marriage so why don't you work hard to get divorce banned? Why do you get to pick and choose the parts of the Bible you care about?

  5. Look at the bright side. With the new Lowe's call center, that means 1000 jobs at $10 bucks an hour. IMS has to be drooling over all that disposable income. If those employees can save all their extra money after bills, in five years they can go to the race LIVE. Can you say attendance boost?

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