Sysco scraps buy­out

Los Angeles Times - - TECHNOLOGY - As­so­ci­ated press

Sysco Corp. is scrap­ping its pro­posed $ 3.5- bil­lion buy­out of US Foods af­ter a Fed­eral Trade Com­mis­sion le­gal vic­tory tem­po­rar­ily blocked the deal to com­bine the two food- ser­vice com­pa­nies.

The FTC op­posed the deal, say­ing it would re­duce com­pe­ti­tion by putting 75% of the na­tional mar­ket for sup­pli­ers to restau­rants and other food- ser­vice oper­a­tions un­der the con­trol of one com­pany. The U. S. Dis­trict Court in Washington, D. C., granted the halt last week.

The end of the deal will cost Sysco. It will pay $ 300 mil­lion to US Foods and $ 12.5 mil­lion to another com­pany, Per­for­mance Foods Group, in breakup fees. Per­for­mance Foods had a deal to buy 11 US Foods fa­cil­i­ties in 11 mar­kets.

The deal, an­nounced in De­cem­ber 2013, was orig­i­nally in­tended to close in 2014, but op­po­si­tion from an­titrust reg­u­la­tors de­layed that.

“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,” Sysco Chief Ex­ec­u­tive Bill De­Laney said in a state­ment Mon­day.

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