Sysco announced it will buy US Foods for $3.5 billion in cash and stocks, creating the largest food distributor in the United States.
The merger means Sysco will own over a quarter of the market share at 27 percent, with the next largest vendor owning only about 5 percent. As part of the deal, Sysco will absorb US Foods' debt of $4.7 billion.
Sysco's stock rose 9.7 percent Monday after news of the deal was released, giving the company a boost after high food prices and a weak economy have damaged stock prices.
Hotels, schools, hospitals and restaurants are all supplied by Sysco with a broad range of products, including paper goods and perishable and non-perishable food.
- Food distributor Sysco to buy US Foods for $3.5 billion (Los Angeles Times)
- Sysco to buy US Foods for $3.5 billion (Washington Post)