A Date is Set for the Sysco US Foods Antitrust Hearings
Get ready: May is just around the corner and it’s going to be a big month for mergers and antitrust issues. This week a federal judge assigned May 5 as the official start date for court hearings concerning the merger currently being attempted between foodservice distribution giants US Foods and Sysco.
It’s important to note that what transpires starting on May 5 won’t be a full on trial. Rather, according to the Wall Street Journal, May 5-8 (and up to three days during the following week depending on whether or not it’s necessary) will be devoted simply to U.S. District Judge Amit Mehta hearing what the case involves and deciding whether or not to issue an injunction and block the merger from moving forward so that the U.S. Federal Trade Commission (FTC) can have the time needed to put together a case for a full on trial.
So both sides are going to have to work hard to make sure their stories are heard and well understood during those few days. While it isn’t a full trial, it will certainly have a bearing on the way that any further trial goes. If Judge Mehta decides not to grant an injunction after the hearing, that could cast the FTC in a poor light as bystanders will understand that a federal judge doesn’t seem to see the case as a big enough deal to grant an injunction for. On the other hand, if Judge Mehta does grant an injunction, any trial ahead could end up being tough going for Sysco and US Food.
The distributors certainly don’t want to see that happen, so they’re already preparing. The WSJ reports that Sysco plans to show that its merger will actually boost competition between retailers and prices, and not cause a price spike as expected. The FTC on the other hand is putting together a host of interviewees to prove its own case.
It’s been a long road for US Foods and Sysco already. For better or for worse depending on the outcome, this is one more step forward toward the actions that the two companies are looking for or toward starting over.
[SOURCE: Wall Street Journal]]
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