In a deal that would create the largest food supplier in the U.S., food distribution giant Sysco is to buy its rival U.S. Foods for $3.5 billion in cash and stock. If approved by regulators the deal would be valued at $8.2 billion, would bring Sysco’s sales from $44 billion to $65 billion per year, and would give current shareholders in U.S. Food approximately 13% of the new company. Sysco will fund the purchase with $3 billion in stock and $500 million in cash, and will also assume $4.7 billion of U.S. Food’s net debt. The transaction is expected to close in the third quarter of 2014 and upon closing would give Sysco a 25% market share in the U.S. food distribution business. Currently Sysco has 193 distribution centers and 425,000 commercial and industrial customers across the U.S.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free bi-weekly enhanced eNews service