NEW YORK (TheStreet) -- Shares of Sysco Corp. (SYY) are down 1.49% to $37 in pre-market trade after it was reported that the FTC is considering a possible antitrust lawsuit to block the planned merger of Sysco and US Foods Inc., concerned that combining the nation's two biggest food suppliers to restaurants, schools and other institutions could threaten competition, sources told the Wall Street Journal.
The FTC, which has been investigating the merger for several months, is weighing other alternatives, such as requiring Sysco and US Foods to divest assets to competitors, sources added.
The commission hasn't yet decided whether to challenge the deal but a decision could come within weeks, sources told the Journal. Sysco announced plans in December to buy US Foods for $3.5 billion
TheStreet Ratings team rates SYSCO CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYSCO CORP (SYY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."