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Sysco Corp. is already one of the largest North American distributors of food and now it's getting bigger. It will purchase its rival US Foods for $3.5 billion.
The New York Times noted that Sysco Crop's purchase of US Foods will be uniting two of the largest food distributors in the U.S.
Sysco CEO Bill Delaney is supportive of the merge since the two distributors have similar values. “Sysco and US Foods have highly complementary core strengths, including a broad product portfolio and passionate food people deeply committed to customer service, quality-assured products and safety," Delaney noted.
Sysco will pay $3 million in stock and $500 million in cash and assume $4.7 billion in debt while its shares rise up by 36 percent.
US Foods shareholders will own 13 percent of Sysco after the deal and the company's revenue will be an estimated $65 billion reported Reuters.
"Combining and maximizing the significant strengths of two outstanding companies is certain to be of tremendous advantage in supporting our customers," US Foods Chief Executive John Lederer said in a statement on Monday.
The deal is projected to be closed by next year after antitrust approval.