The US District Court in the District of Columbia has approved the Federal Trade Commission (FTC) request for a preliminary injunction to block Sysco Corporation’s proposed merger with US Foods Inc.
This planned $3.5 billion takeover of US Foods was blocked by US District Judge Amit Mehta, who wrote in an order, “The FTC has shown that there is a reasonable probability that the proposed merger will substantially impair competition.”
The case now moves to the FTC’s in-house administrative court, where the federal agency will attempt to permanently prevent the merger.
Sysco Corp issued this statement from Bill DeLaney, president and chief executive officer:
“While we respect the court’s decision, we are profoundly disappointed with this outcome. We diligently pursued this transaction for nearly two years because we strongly believed the merger of Sysco and US Foods would be procompetitive and good for customers, associates, and shareholders. Nevertheless, we certainly understood this outcome to be possible and have been developing plans for the business moving forward. 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. This work will be conducted in close collaboration with Sysco’s board of directors and the primary owners of US Foods. We will provide additional clarity in the coming days.”
Houston TX-based Sysco operates 194 distribution facilities serving about 425,000 customers. For fiscal year 2014 that ended June 28, 2014, the company generated sales of more than $46 billion. For more details, go to www.sysco.com.