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Sysco Merger Brings Sale Of Local US Foods Facility



In order to appease federal antitrust regulators and help finalize its merger with US Foods, Sysco Corp. announced February 2 it will sell 11 US Foods distribution centers—including the Minneapolis location—to Performance Food Group.

Since the December 2013 announcement of Sysco’s $3.5 billion offer to buy US Foods, industry insiders have forecasted many consequences, including higher prices—especially for smaller operators who have less buying power. If approved by the Federal Trade Commission, the deal would combine the two largest U.S. food distributors.

In a statement, Sysco President and CEO Bill DeLaney said his company has spent the past 12 months working with the FTC to win its approval for the deal, which the company maintains will be good for customers and allow Sysco to take advantage of combined supply-chain expertise.

“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,” DeLaney said in the statement.

The agreement calls for Sysco to sell Performance Food Group the following US Foods facilities at the completion of the US Foods transaction: Corona, California; Denver, Colorado; Kansas City, Kansas; Phoenix, Arizona; Salt Lake City, Utah; San Diego, California; San Francisco, California; Seattle, Washington; Cleveland, Ohio; Las Vegas, Nevada; and Minneapolis, Minnesota.

These centers generated $4.6 billion in revenue in US Foods’ most recent fiscal year, according to Sysco. The agreement will enable the Performance Food Group to compete effectively for national broadline foodservice customers, said CEO George Holm said in a statement.

“We are excited by the opportunities for growth presented by this transaction and are confident that we will effectively execute our plans to become one of the country’s premier broadline distributors serving customers coast to coast,” Holm said.

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