US: Sysco, US Foods to sell 11 facilities to win deal approval

Food service giant Sysco Corp. has agreed to sell 11 US Foods facilities to Performance Food Group. The divestiture is related to Sysco’s pending merger with US Foods, and the sale is contingent upon the completion of the merger.

Sysco said Federal Trade Commission has not yet agreed to the divestiture as a solution to commission’s concerns. Sysco and US Foods plan to present its position, including the divestiture plan, to the FTC and seek to obtain the commissioners’ approval. The majority of the five commissioners must approve the transaction.

“Over the past 12 months, we have worked in good faith with the FTC to help them better understand the highly competitive US foodservice distribution industry and the significant customer benefits that will result from the merger of Sysco and US Foods,” said Bill DeLaney, Sysco president and CEO. “Unfortunately, the FTC has taken a different view of the potential competitive impacts of the merger. While we respectfully but vigorously disagree with the FTC’s analysis, we believe this divestiture package fully addresses its concerns.”

Sysco will now present the package to the regulator and seek its approval.

Full Content: The New York Times

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