Sysco officers met with five officials from the Federal Trade Commission yesterday in order to prevent a possible lawsuit that would block the company’s purchase of US Foods, according to the Wall Street Journal. The source reports that Sysco sought further negotiations with the FTC but “did not put forward a new formal offer to divest additional assets to win approval.” Last week Sysco announced that it would sell assets—11 US Foods distribution centers— to competitor Performance Food Group. However, the divestiture package is contingent on consummation of the proposed merger of Sysco and US Foods.
In December 2013, Sysco and US Foods announced the multi-billion dollar merger. The total enterprise value of the transaction was approximately $8.2 billion. Two months later in February 2014, US Foods announced that it had anticipated and received a request from the FTC for additional information and documentary materials in connection with its pending merger with Sysco Corp.
Although the deal was expected to close in 2014, it remains delayed pending the FTC review. The Wall Street Journal reports that FTC officials fear the merger would lead to higher prices for schools, restaurants, etc. to buy food and ancillary products.
