Major Food Distributor Sysco Selling 11 Distribution Centers to Complete Merger with Biggest Competitor

After the acquisition, the next biggest competitor will control less than 10 percent of the market

Photo Sasabune Omakase Modified: Flickr/erin/CC 4.0

The Federal Trade Commission has previously expressed concern that the merger will give Sysco undue power within the food distribution marketplace. 

Sysco Corporation, the multinational food distributor that is currently in the process of acquiring US Foods, the company’s largest rival, for $3.5 billion, has agreed to sell 11 of its distribution facilities in a bid to appease antitrust regulators, reports The New York Times

Previously, regulators including the Federal Trade Commission have expressed concerns over the deal, arguing that the acquisition would make Sysco too powerful.

The company’s next biggest competitor, Performance Food Group, would be left with less than 10 percent of the food distribution market, a multi-billion dollar industry that services restaurants, hospitals, the military, educational facilities, hospitality businesses, and other industries with foodservice needs.

The sale of a number of Sysco’s assets, to Performance Food Group, is a strategic move to gain the approval of regulators who have expressed concerns about antitrust measures.

If approved, the deal is estimated to be save Sysco $600 million within the next four years. 

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