Blog: Mega deal set to shake up US foodservice distribution
Dean Best | 10 December 2013
Off our beat but food manufacturers serving the US foodservice sector should note the proposed takeover of US Foods by rival Sysco.
The companies are the two largest foodservice distributors in the US and Sysco said the deal, if approved, will create a business generating annual sales of around US$65bn.
The takeover, if backed by anti-trust regulators (and that, according to some, could be a challenge), will see Sysco pay US private-equity firms KKR and Clayton, Dubilier & Rice a mix of cash and stock for US Foods.
The private-equity firms paid Dutch grocery retail giant Ahold $7.1bn for US Foods in 2007.
Sysco's largest customers include quick service restaurant chains like McDonald's and Wendy's but it has around 425,000 clients across the US.
Both Sysco and US Foods serve a wide range of customers, including restaurants and hotels but also healthcare and educational establishments.
The combined entity is expected to account for around 25% of sales in the national US foodservice sector, potentially presenting Sysco with greater purchasing power when dealing with its suppliers.
Industry watchers are split on whether US regulators will ask Sysco to offload some assets to get the deal through but, even if the company has to sell some bits of its business, the transaction looks set to create a powerful operator in the channel.
Today (23 December) is just-food's last day before closing for Christmas. We'll return, raring to go on Tuesday 3 January - but of course there's been plenty of top-notch content that has gone live in...
The plethora of food manufacturing associations in the UK has been argued by some to be an impediment to the industry coming to a coherent position on the aftermath of Brexit and on what the sector sh...
- 2017: three major drivers of M&A strategy
- The food market in 2017 - consumer trends and M&A
- just-food 2017 Survey - your thoughts on growth
- Food market in 2017: need-to-know US trends
- 2017 - what will shape the UK food sector?
- Premier Foods issues profit warning
- UK's Bakkavor plays down IPO "speculation"
- Kellogg to slash 250 jobs
- Ferrero insists Nutella not pulled from shelves
- Lindt sees FY sales acceleration on Europe growth