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. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

ADVERTISEMENT