Federal regulators sue to block Sysco merger
The Federal Trade Commission filed suit Thursday to stop the planned merger of Houston's Sysco Corp. and its largest competitor, US Foods, saying the combination would violate antitrust laws by significantly reducing competition nationwide.
Sysco says it plans to fight the regulators in court.
Bill DeLaney, president and CEO of Sysco, said in a statement: "The facts are strongly in our favor and we look forward to making our case in court. Those of us who work in this industry every day know it is fiercely competitive. Customers of all types have access to food distribution services from a wide variety of companies and any number of channels. In fact, the overwhelming majority of restaurants and food operators choose their foodservice distributor locally, where they have choices among many excellent companies."
But the FTC said in its suit if the merger between Sysco and Illinois-based US Foods goes forward as proposed, food service customers including restaurants, hospitals, hotels and schools, would face higher prices and diminished service. The commission is seeking a temporary restraining order to prevent the parties from going forward with the merger.
"This proposed merger would eliminate significant competition in the marketplace and create a dominant national broadline food service distributor," said Debbie Feinstein, director of the FTC's Bureau of Competition, in a statement. "Consumers across the country, and the businesses that serve them, benefit from the healthy competition between Sysco and US Foods, whether they eat at a restaurant, hotel, or a hospital."
Read more: http://www.chron.com/business/retail/article/Federal-regulator-s-sue-to-block-Sysco-merger-6090150.php