Sysco to Acquire Jetro Restaurant Depot in $29 Billion Deal

The deal, one of the largest in the food distribution sector in recent years, will be financed through a combination of $21 billion in new and hybrid debt and $1 billion in cash and equity, per Reuters. Following the announcement, Sysco’s shares dropped roughly 12%, reflecting investor concerns about the scale of borrowing tied to the acquisition. The company currently holds a market capitalization of about $39.2 billion.

According to Reuters, the acquisition comes amid a broader wave of consolidation across consumer-facing industries, as companies pursue scale to offset weaker demand and persistently high costs. Recent deal activity has also involved firms such as Unilever, Estee Lauder and Pernod Ricard.

Jetro Restaurant Depot, a family-owned business, operates a wholesale cash-and-carry model in which customers pay upfront for goods, including food, beverages and packaging supplies. This approach complements Sysco’s traditional delivery-based network serving restaurants, healthcare facilities and hospitality clients. Per Reuters, the acquisition will allow Sysco to expand into the higher-margin cash-and-carry segment, where Restaurant Depot currently runs about 166 warehouse locations across 35 U.S. states.

Related: Sysco’s Meat Price-Fixing Settlement Enforceable, Federal Court Rules

Under the terms of the agreement, Restaurant Depot shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares, valued at approximately $7.5 billion as of last week’s close, according to Reuters. This would give them an estimated 16% stake in the combined company.

The deal follows previous consolidation attempts in the sector. Last year, US Foods ended merger discussions with Performance Food Group, which would have combined the second- and third-largest distributors in the U.S. to better compete with Sysco, per Reuters. A decade earlier, in 2015, a federal judge blocked Sysco’s proposed $3.5 billion acquisition of US Foods after regulators raised antitrust concerns.

Sysco executives emphasized that the overlap between the two companies’ customer bases is limited. The company also outlined expansion plans for Restaurant Depot, expecting to open more than 125 new locations over the next two decades by leveraging Sysco’s supply chain capabilities, according to Reuters.

Sysco said the acquisition is expected to increase earnings per share by a mid- to high-single-digit percentage in the first year after closing, with the increase anticipated by the third quarter of fiscal 2027, per Reuters.

Credit rating agencies responded cautiously to the announcement. Fitch placed Sysco on “rating watch negative,” while Moody’s said it is reviewing the company’s ratings for a possible downgrade, according to Reuters.