Sysco Corp. has terminated its merger with US Foods after the Federal Trade Commission’s request for preliminary injunction to block the deal was granted.
In February, the FTC filed an administrative complaint arguing that the merger of Sysco and US Foods would violate antitrust laws. The FTC said it would significantly reduce competition nationwide and in 32 specific markets. The U.S. District court in Washington D.C. agreed and eventually granted the FTC’s preliminary injunction.
"After reviewing our options, including whether to appeal the court's decision, we have concluded that it's in the best interests of all our stakeholders to move on," said Bill DeLaney, Sysco president and chief executive officer.
By ending the agreement, Sysco has also terminated a deal with Performance Food Group to purchase US Foods in 11 markets. Sysco must also pay break-up fees of $300 million to US Foods and $12.5 million to PFG.
"We believed the merger was the right strategic decision for us, and we are disappointed that it did not come to fruition,” said DeLaney. “However, we are prepared to move forward with initiatives that will contribute to the success of Sysco and our stakeholders."