This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Agencies Vie For Claim To US Foods Takeover

NEW YORK (The Deal)--The antitrust review of Sysco's (SYY - Get Report) proposed $8.2 billion purchase of food distribution rival US Foods, already expected to be lengthy, has been delayed getting under way because the Federal Trade Commission and the Department of Justice have not yet decided which agency should review the deal.

"The government has not determined which of the agencies will actually be responsible for reviewing the transaction yet," Sysco CFO Chris Kreidler told attendees at the 16th Annual ICR XChange Conference in Orlando, Fla., Tuesday.

"We don't really understand and don't know who's going to get it. We know they're discussing and we just don't know who's going to be on point," he said.

In most cases, it's clear which agency will review a particular merger because the DOJ and the FTC generally have divided responsibility according the amount of experience each one has in a particular industry. Sometimes, as with the US Foods acquisition, it's not clear which agency has the better claim to expertise.

Although some staff at the FTC had expected to be assigned the deal, neither agency has reviewed a major merger of food distributors.

The DOJ, however, has deep expertise in food and transportation. It's recent deals in the area include last year's merger of Anheuser-Busch InBev  (BUD) and Grupo Modelo, Grupo Bimbo's 2011 acquisition of Sara Lee's North American Fresh Bakery business and several mergers of major meat packers.

The FTC's claim to the deal lies in its experience reviewing grocery and retail transactions. Although Sysco and US Foods primarily serve institutional clients, such as restaurants, universities and military installations, rather than grocery stores, the commission has argued that it has developed expertise with institutional clients by handling antitrust reviews for ConAgra Foods' (CAG - Get Report) 2012 acquisition of the Bertolli and P.F. Chang's Home Menu frozen meal business from Unilever  (UL) and Kellogg's (K) 2009 acquisition of Wholesome & Hearty Foods' Gardenburger business.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BUD $123.55 0.82%
CAG $36.90 0.38%
SYY $38.26 0.26%
AAPL $126.37 2.53%
FB $83.20 -0.13%


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs