Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D.D.C.: Hearing date set in Sysco-U.S. Foods merger challenge, (Mar 5, 2015)
Organizations Mentioned:Sysco | Sysco Corp. | US Foods, Inc.
By Jody Coultas, J.D.
Hearings on the FTC’s request for a preliminary injunction in its challenge to the merger of Sysco Corp. and US Foods will begin May 5, 2015, and will conclude no later than May 13, 2015, the federal district court in Washington, D.C. has decided (FTC v. Sysco Corp., March 5, 2015, Mehta, A.).
Sysco and US Foods are the largest broadline foodservice distributors in the United States. Broadline distributors offer national-brand and private-label food products, and provide frequent and flexible delivery, customer service, and other value-added services such as order tracking, menu planning, and nutritional information.
The FTC has alleged that a combined Sysco/US Foods would account for 75 percent of the national market for broadline distribution services. In addition, the parties would also hold high shares in a number of local markets. Sysco and US Foods are the only broadline distributors with numerous distribution centers spread throughout the country, and compete vigorously with each other to meet the needs of customers with foodservice locations dispersed nationwide or across multiple regions of the country. Many hotel chains, foodservice management companies, and group purchasing organizations consider Sysco and US Foods to be each other’s closest competitor, and, in some cases, those customers’ only meaningful alternatives for national broadline distribution services. Sysco and US Foods also compete aggressively for the broadline business of independent restaurants and other local customers that operate in a local area or region. The merger is likely to harm competition in 32 local markets, the FTC claims.
The FTC filed a complaint, seeking a preliminary injunction to block the merger while the FTC holds a trial in its in-house administrative court system.
The court also held that the identities of third parties who provided affidavits or other information during the FTC investigations would remain under seal. Defendants may file a motion challenging the non-disclosure of such third-parties’ identities.
The case is No. 1:15-cv-00256 (APM).
Companies: Sysco Corp.; US Foods, Inc.
Cases: AcquisitionsMergers Antitrust FederalTradeCommissionNews DistrictofColumbiaNews