By Chelsey Dulaney
Sysco Corp. said Monday it is walking away from its planned
acquisition of US Foods Inc. after a federal judge issued a
preliminary injunction against the deal last week.
The deal, announced in December 2013, would have combined the
nation's two largest food distributors, which provide ingredients
and a range of other supplies to restaurants, hotels, schools and
other food-service operations.
Sysco shares added 1.6% in premarket trading.
Sysco said it will pay US Foods a breakup fee of $300 million.
The company also said it will spend another $3 billion buying back
shares over the next two years and will redeem $5 billion in
merger-related debt.
The Federal Trade Commission filed a lawsuit in February
challenging the transaction on antitrust grounds.
Last week's injunction was the latest in a string of
merger-enforcement matters in which antitrust officials appointed
to the FTC and the Justice Department by President Barack Obama
have flexed their muscles to block or pare back mergers they
believed would harm competition.
"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's
chief executive. "We believed the merger was the right strategic
decision for us, and we are disappointed that it did not come to
fruition."
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Access Investor Kit for Sysco Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8718291078
Subscribe to WSJ: http://online.wsj.com?mod=djnwires