NEW YORK (TheStreet) --Shares of Sysco Corp. (SYY) are higher by 1.51% to $38.98 in pre-market trading on Monday morning; today the food distributor announced it has terminated its $3.5 billion merger agreement with US Foods.
Sysco's decision comes days after a U.S. district court in Washington, DC approved the FTC's request to block the combination of the two companies over concerns the transaction would hurt competition in the market.
"After reviewing our options, including whether to appeal the Court's decision, we have concluded that it's in the best interests of all our stakeholders to move on," Sysco CEO Bill DeLaney said in a statement.
"We believed the merger was the right strategic decision for us, and we are disappointed that it did not come to fruition. However, we are prepared to move forward with initiatives that will contribute to the success of Sysco and our stakeholders," DeLaney added.
Additionally, Sysco announced that its board has authorized the company to spend $3 billion in order to buy back shares over the next two years.
Separately, TheStreet Ratings team rates SYSCO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SYSCO CORP (SYY) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."