Sysco Corp. to buy US Foods
Sysco Corp. Shares leaped up after it agreed to buy US Foods for about $3.5 billion in stock and cash, uniting two of the nation’s largest food distributors. Sysco shares jumped almost 10 percent to hit their highest point in decades. The deal will see Houston-based Sysco, capture about 25 percent of the nation’s food distribution business.
It said it expects the addition of US Foods to increase annual sales by 46 percent to about $65 billion. The company, whose trucks move millions of pounds of frozen food and kitchen supplies around the country, said the transaction is expected to close by the third quarter next year, pending antitrust approval.
For the fiscal year that ended in June, Sysco’s sales amounted to a total of $44.41 billion. It trucks food and cooking supplies to about 425,000 customers through 193 locations in the U. S., Bahamas, Canada, Ireland and Northern Ireland. Its US Food customers include independent and chain restaurants, health care and hospitality companies, and government and educational institutions.
John Lederer, President and Chief Executive Officer of US Foods, said in a prepared statement, “Combining and maximizing the significant strengths of two outstanding companies is certain to be of tremendous advantage in supporting our customers as they tackle the challenges of today’s demanding environment.” On Monday, Sysco’s shares climbed 9.65 percent to close at $37.62.
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