$8.2 billion merger extended
$8.2 billion merger extended
Sysco Corp. has extended the deadline for its merger with US Foods. The initial deadline, March 8, was pushed back 60 days to May 7, two days after a hearing on the Federal Trade Commission’s claim that the deal would violate the antitrust laws.
According to the Wall Street Journal, the May 5 trial will determine if there is a temporary injunction on the deal before the FTC’s administrative trial begins July 21, two-and-a-half months after the merger’s new deadline.
The $8.2 billion merger was initially announced in December of 2013, but the FTC claims that the proposed merger of Sysco and US Foods would violate the antitrust laws by significantly reducing competition nationwide and in 32 local markets for broadline foodservice distribution services.
The FTC alleges that if the merger goes forward as proposed, foodservice customers, including restaurants, hospitals, hotels and schools, would likely face higher prices and diminished service than would be the case but for the merger.
“This proposed merger would eliminate significant competition in the marketplace and create a dominant national broadline foodservice distributor,” Debbie Feinstein, director of the FTC’s Bureau of Competition, previously said. “Consumers across the country, and the businesses that serve them, benefit from the healthy competition between Sysco and U.S. Foods, whether they eat at a restaurant, hotel or a hospital.”
