Sysco pulling out of US Foods buyout after FTC move

[Omaha Steve]

Source: AP

NEW YORK (AP) — Sysco is scrapping its proposed $3.5 billion buyout of US Foods after a Federal Trade Commission legal victory that temporarily blocked the deal to combine the two food-service companies.

The FTC opposed the deal, saying it would reduce competition by putting 75 percent of the national market for suppliers to restaurants and other food-service operations under the control of one company. The U.S. District Court in Washington, D.C., granted the halt on Tuesday.

The end of the deal will cost Sysco. It will pay $300 million to US Foods and $12.5 million to another company, Performance Foods Group, in breakup fees. Performance Foods had a deal to buy 11 US Foods facilities in 11 markets.

The deal, announced in December 2013, was originally intended to close in 2014, but opposition from antitrust regulators delayed that.

FULL story at link.



FILE - This Monday, Aug. 15, 2005, file photo, shows the corporate headquarters of Sysco Corp., the largest food-service distributor in North America, in Houston. Sysco announced Monday, June 29, 2015, it is scrapping its proposed $3.5 billion buyout of US Foods after a Federal Trade Commission legal victory that temporarily blocked the deal to combine the two food-service companies. (AP Photo/David J. Phillip, File)

Read more: http://bigstory.ap.org/article/8e3b1deaee354d1fb0444451b292ef96/sysco-pulling-out-us-foods-buyout-after-ftc-move

[beemer27]

1. This is good news.

We have way too many "mega" companies, corporations, and businesses already. It would be dangerous to place 75% of the restaurant supply business in one place. Let some smaller companies compete for this market. We haven't had real free trade or honest capitalism in years. All that we have seen recently is money men merging one business with another to increase the profit. This money is not coming out of their pockets, it is coming out of ours. If the people of our government had our interest in mind, they would prevent most of these large mergers.

[asiliveandbreathe]

2. Remember Divestiture of AT&T? -

1983 - Biforcation - 1984 divestiture...when I think about the changes we went through. it was all worth it.

Markey - Mass..one of the leading chargers....

This a good decision - considering we have these laws on the books....

The main statutes are the Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. These Acts, first, restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Second, they restrict the mergers and acquisitions of organizations which could substantially lessen competition. Last but not least,Third, they prohibit the creation of a monopoly and the abuse of monopoly power.