Company Press Release
HOUSTON, April 22, 2015 (GLOBE NEWSWIRE) — Sysco Corporation (NYSE:SYY) filed a memorandum opposing the U.S. Federal Trade Commission’s (FTC) effort to block its proposed merger with US Foods, a transaction that would make the U.S. foodservice distribution industry more competitive.
Sysco filed the memorandum yesterday in the U.S. Federal District Court for the District of Columbia in opposition to the FTC’s motion for preliminary injunction. A hearing on the FTC’s motion is scheduled to begin May 5, during which the company intends to emphasize, at minimum, the following points:
• A market for broadline foodservice distribution services for “national customers” does not exist. The foodservice distribution industry is extremely competitive. Customers of all sizes, including the industry’s largest customers, have many options from which to choose, including systems distributors, specialty distributors, cash-and-carry stores and broadline distributors.
• Local markets are highly competitive. The FTC’s flawed logic on the structure of the local foodservice distribution market led to dubious analysis of market share. In one instance, the FTC claims Sysco and US Foods would control 100 percent of the market in San Diego. In reality, more than two dozen companies compete for customers’ business in San Diego. Local market dynamics are similar across the U.S.
• Synergies will reduce Sysco’s annual costs by at least $600 million. These savings allow the combined company to become more efficient, invest in improved customer service and innovative products, and reduce customer prices, all of which contribute to an even more competitive market.
• A robust, binding divestiture package with Performance Food Group creates a stronger competitor. The proposed sale of facilities in 11 markets to PFG directly addresses FTC concerns that the merger might reduce choice for customers with locations in multiple local markets and regions.
Bill DeLaney, Sysco’s president and chief executive officer, said, “We look forward to presenting all of the facts in court and ultimately, through this merger, delivering better service at a lower cost through a more efficient, innovative and competitive combined company.”
Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. The company operates 194 distribution facilities serving approximately 425,000 customers. For Fiscal Year 2014 that ended June 28, 2014, the company generated sales of more than $46 billion. For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoCorporation or Twitter at https://twitter.com/Sysco.
About US Foods
As one of America’s great food companies and leading distributors, US Foods is Keeping Kitchens Cooking™ and making life easier for customers, including independent and multi-unit restaurants, healthcare and hospitality entities, government and educational institutions. With approximately $22 billion in annual revenue, the company offers more than 350,000 products, including high-quality, exclusive brands such as the innovative Chef’s Line®, a time-saving, chef-inspired line of scratch-quality products, and Rykoff Sexton®, a premium line of specialty ingredients sourced from around the world. The company proudly employs approximately 25,000 people in more than 60 locations nationwide. US Foods is headquartered in Rosemont, Ill., and jointly owned by affiliates of Clayton, Dubilier & Rice LLC and Kohlberg Kravis Roberts & Co. L.P. Discover more at www.usfoods.com.
CONTACT: For more information:
Charley Wilson, Vice President, Corporate Communications, T: 281-584-2423
Shannon Mutschler, Vice President, Investor Relations, T: 281-584-1308