FTC and Sysco Meet in Efforts to Circumvent Antitrust Lawsuit
HOUSTON, TX - Sysco’s last-ditch effort to persuade the FTC paid off… to an extent.
The FTC was scheduled to vote on whether Sysco would soon be at the end of its series of roadblocks in its venture to merge with US Foods, or continue on to court. The decision, however, has been delayed due to a day of meetings with Sysco in a last attempt to convince the commision not to file a lawsuit.
The company met with the FTC, according to New York Post reports, to assure the committee that the merger would actually lower costs as opposed to raise them. If they fail to do so, the FTC will apply to a judge to rule on whether or not the merger would fail to leave any level competition, leaving a monopoly in food distribution.
And, according to cited sources from the report, that was the direction the FTC was leaning towards on Tuesday night.
“My impression is they are going to file a suit,” a direct source, who the Post clarifies would like to see the merger approved, said before the meeting. The report clarifies that this sentiment was a general consensus among those interviewed. But the arguments Sysco raised appear to have had some effect, as a decision that seemed all but finalized has now been delayed.
The win, however, is at a price. The FTC wants Sysco to offer up divested assets that generate $2 billion in revenue on top of the company’s most recent offer of selling 11 stores that generated over $4.2 billion in revenue during the last fiscal year, the Post reports.
With the debt already proposed added, the entire deal is worth over $8 billion.
“Sysco is worried about dismantling what they have,” the source told the New York Post.
A potential lawsuit would post a strong blockade on Sysco’s plans to merge with US Foods, but the deal is getting more and more expensive. Stay tuned to AndNowUKnow as this story continues to develop.
