Blog: Dean BestMega 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.

BLOG

What does Gen Z want from brands? IRI presents its view

Industry watchers IRI has published the findings of two studies in the US they claim can give an insight into the shopping patterns of those aged 21 and under - Gen Z....

BLOG

The identity of the buyer of Tyson's Kettle business emerges

In February, we reported Tyson Foods had sold its Kettle business, one of a series of non-protein disposals at the US meat giant. But the company would not disclose the buyer. This week, the new owner...

BLOG

Leading French grocers eye buying "alliance" - and suppliers aren't happy

Buying partnerships between France's food retailers have been a feature of the country's grocery landscape for a number of years but this week came news of a potentially significant new tie-up - and s...

BLOG

just-food off for Easter

A point of admin: just-food is closed tomorrow (Good Friday) and on Easter Monday. It promises to be a wet public holiday here in the UK but we'll likely console ourselves in chocolate....



Forgot your password?