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ARTICLE · 06 JULY 2015

FTC Scores Decisive Win In Challenge To Food Distribution Merger

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On Tuesday, a federal judge issued an injunction blocking the Sysco – US Foods ("USF") merger pending further administrative review by the FTC.

United StatesAntitrust/Competition Law
A&O Shearman
A&O Shearman
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On Tuesday, a federal judge issued an injunction blocking the Sysco – US Foods ("USF") merger pending further administrative review by the FTC. The move, which ended Sysco's acquisition plans, represents a decisive victory for the FTC.

Background

The proposed $8.2 billion dollar Sysco/USF deal, first announced in December 2013, would have combined the two largest "broadline" food distribution firms in the United States. Broadline distributors – in contrast to specialist, systems, or "cash and carry" food sellers – provide a wide range of foods and food service products directly to customers at their place of business. According to the FTC's complaint, broadline firms are distinguished by their combination of product breadth and depth, private label inventory and customer service (including frequent and flexible delivery), setting them apart from other alternative suppliers.

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