Could Sysco choose another target for acquisition?

By Frazer Jones
In 2014, the prospective merger between food distribution giants Sysco and U.S. Foods looked like it would be one of the biggest industry mergers in som...

In 2014, the prospective merger between food distribution giants Sysco and U.S. Foods looked like it would be one of the biggest industry mergers in some time. But the transaction was not to be—after months of conflict with the Federal Trade Commission and the threat of an antitrust lawsuit, the two supply chain businesses finally called the whole the deal off last month.

RELATED CONTENT: Sysco officially parts ways with US Foods

But does that mean that Sysco is completely done with acquisitions? That doesn’t have to be the case. As finance site TheStreet reports, Sysco has expressed interest in other food distribution businesses before as well, and these could wind up being better targets in the long run.

RELATED CONTENT: Top Ten Mergers and Acquisitions of the Year

As TheStreet points out, the most crucial flaw of the attempted merger between Sysco and U.S. Foods was that, when the two combined, they accounted for more than 50 percent of the United States food distribution industry market share. That automatically raised antitrust red flags for the FTC. But a smaller distribution company such as Performance Food Group (PFG) or McLane, both of which currently occupy 10 percent of the market share, could make perfect sense if Sysco makes another move toward acquisition:


In a 2013 interview, Sysco CEO Bill DeLaney and CFO Chris Kreidler said that both Performance Food and McLane would be attractive targets. They made the comments on the sidelines of an industry conference. 

 

Not that acquiring another business would be easy for Sysco—both PFG and McLane have private equity owners of their own, with McLane even being a Berkshire Hathaway property. But if Sysco is seeking to grow through acquisition, they’re both major businesses worth pursuing.

 

[SOURCE: TheStreet]

 

Share

Featured Articles

New Biotechnology Serves Benefits to the Food Industry

Major companies Danone, Michelin and DMC, collaborate to create a biotechnology platform to better the food industry through upgraded fermentation use.

Nestlé Announces New CEO Alongside Future Investment Plans

Nestlé appoints Guillaume Le Cunff as new CEO of Zone Europe, along with future plans surrounding sustainability, mergers and acquisitions and innovation.

Danone Launches new Global Training Programme

Danone partners with leading technology firms: Google, Microsoft and Alibaba Cloud to utilise AI and technology in upskilling 100,000 employees worldwide.

Mondelēz Cements Snacks Industry Position With Biscuit Lab

Food

Sainsbury's Targets Sustainable Cocoa by 2025

Sustainability

Coca-Cola Bottling Company Embracing ESG Challenges

Drink