Merger of food giants goes cold
Merger of food giants goes cold
The Federal Trade Commission prevailed in its battle to prevent the merger of two foodservice giants after a federal judge on June 23 issued a preliminary injunction preventing Sysco from acquiring U.S. Foods.
The deal, originally announced in December 2013, which would have combined the two leading U.S. food distribution companies, “will substantially impair competition,” according to U.S. District Judge Amit Mehta.
The ruling, which followed two weeks of legal proceedings in May and included testimony from both executives and customers of the two companies, could mean the deal is off for good. A U.S. Foods executive said during court proceedings that the company would walk away from the deal if it was not approved by Judge Mehta, according to the Wall Street Journal.
In a statement, Bill Delaney, chief executive officer of Sysco, said the company was “profoundly disappointed.”
He added, “We will take a few days to closely review the court’s ruling and assess our legal and contractual obligations, including the merits of terminating the merger agreement.”
“We are ready for whatever comes next,” John Lederer, CEO of U.S. Foods, said in a written statement. “We have the talent, passion and financial foundation to take this company to the next level for our customers and for our employees.”