F&D Reports Releases White Paper on the Pending Sysco-US Foods Merger

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White Paper Provides Analysis of Proceedings and Future Outlook

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The White Paper provides an analysis of the key arguments that were made in the case, our view of how the judge will ultimately rule, and the outcome of each possible scenario.

Industry-leading credit consulting firm Information Clearinghouse, Inc. (ICI), through its F&D Reports division, has released a White Paper discussing the court proceedings in the FTC’s challenge to the planned merger of Sysco-US Foods (Federal Trade Commission v. Sysco Corp, in the U.S. District Court for the District of Columbia, No. 15-00256) following last week’s closing arguments, including speculation of the likely conclusion to one of the most closely watched antitrust cases in recent history.

During the eight days of evidentiary proceedings, U.S. District Judge Amit Mehta reportedly threw darts at both sides of the board, questioning the reliability of the FTC’s market share calculations and noting “plenty of evidence” that buyers of food-distribution services use a mix of providers besides Sysco and US Foods, while also saying there appears to be customers who view the two companies as the only viable options for nationwide service. The judge’s ruling on whether to issue a preliminary injunction that would block the $8.20 billion deal is expected in the coming weeks and could determine the fate of the merger, as the losing party is expected to walk away.

The White Paper provides an analysis of the key arguments that were made in the case, our view of how the judge will ultimately rule, and the outcome of each possible scenario, including the potential financial implications for the two companies.

Commenting on the White Paper, CEO Lawrence Sarf stated, “We have been skeptical from the jump that this deal would ever survive all the way to the finish line. Judge Mehta has not turned all his cards face up yet; however, if one looks closely at the questions and answers exchanged between himself and counsel from both sides, we have not swayed from that early position that the outlook does not look favorable for advancing the deal. Once the decision is rendered, assuming the issuance of a preliminary injunction, the next question is will Sysco appeal if for no other reason but to delay writing those big termination fee checks.”

Information Clearinghouse, Inc. (publisher of F&D Reports, Creditntell, & ARMS) is a leading retail credit consulting firm specializing in the analysis of public and private companies in numerous retail segments. The focus of its analysis is to deliver the key intelligence today’s busy credit executive needs to make a highly informed decision without sifting through pages of non-essential data. To learn more, visit our websites at http://www.fdreports.com, http://www.creditntell.com, http://www.fdarms.com.

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Robert Marzo
F&D Reports
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