Tomahawk, WI 12/11/2013 (BasicsMedia) – SYSCO Corporation (NYSE:SYY) made an announcement on December 9, Monday, that it has agreed to acquire US Foods, one of its key rivals.


The company has agreed to acquire US Foods for about $3.5 billion.  However, the total value of deal is $8.2 billion where approximately $4.7 billion will be refinanced by the company for the debt of US Foods. The company has agreed to pay $3.5 billion in cash and stock, where $3 billion will be paid in common stock while $500 million will be paid in cash. After the completion of deal, the shareholders of US Foods will own approximately 87 million shares or about 13% of the common stock of SYSCO Corporation (NYSE:SYY).

Company’s Growth

The acquisition is expected to boost the annual sales of the company to about $65 billion, which is by more than 45%. This result is expected because of the fact that large product portfolio of US Foods will best complement with the core strengths of SYSCO Corporation (NYSE:SYY). These two companies will merge to give best quality services to their customers. The company is working on reducing the costs; however, it must be careful, as these spiralling costs can have negative impacts on profit margins of the company.


Bill DeLaney, the president and Chief Executive Officer of the company, will run SYSCO Corporation (NYSE:SYY). There are some more developments within the company that need to be noted. The Executive Chairman of the Board of Directors, Manuel (Manny) Fernandez, stepped down at the Annual shareholders gathering of the company. Jackie M. Ward took over as the Non-Executive Chairperson on the Board of Directors.

Business Strengths

The major stakeholders of US Foods include Kohlberg Kravis Roberts & Co, Dubilier & Rice LLC and Clayton. The company also extends its help to serve many educational and government institutions and chain restaurants. SYSCO Corporation (NYSE:SYY) also reaches out to more than 425,000 customers with cooking and food supplies.  Therefore, these companies together, can do wonders.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.