IBJNews

Indiana joins Feds in reviewing merger of Sysco, US Foods

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

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

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT