Sysco Reaches Agreement to Sell 11 US Foods Distribution Centers to Performance Food Group Contingent on Consummation of Sysco-US Foods Merger
Package of Locations With $4.6 Billion in Annual Revenue Designed to Allay Federal Trade Commission Concerns
Sysco Corporation (NYSE:SYY) today announced that it has reached a definitive agreement to sell Performance Food Group 11 US Foods facilities related to its pending merger with US Foods. The divestiture package is contingent on consummation of the proposed merger of Sysco and US Foods announced in December 2013.
Sysco will now present its position, including this proposed remedy, to the five FTC commissioners and seek to obtain their approval.
The agreement calls for Sysco to sell Performance Food Group the following US Foods facilities at the completion of the US Foodstransaction:Corona, Calif.; Denver, Col.; Kansas City, Kan.; Phoenix, Ariz.; Salt Lake City, Utah; San Diego, Calif.; San Francisco, Calif.;Seattle, Wash.; Cleveland, Ohio; Las Vegas, Nev.; and Minneapolis, Minn.
In US Foods’ most recent fiscal year, these distribution centers generated $4.6 billion in annual revenue. Sysco and Performance Food Group have also have agreed on a comprehensive multi-year transition services agreement to ensure a smooth transfer of assets fromUS Foods to Performance Food Group by providing various support services and personnel to help Performance Food Group succeed as the new business owner in these locations.
After selling these facilities, Sysco estimates it still will be able to achieve net annual synergies of at least $600 million in four years. This estimate reflects additional synergies identified during the company’s integration planning efforts.