Sysco Corporation's announced that its merger with US Foods has been delayed and could now close either late during Q3 or during Q4, pending approval by the Federal Trade Commission, according to The Wall Street Journal. The holdup is a product of the ongoing review process by the FTC, but Sysco is not concerned about the delay, saying that it still considers everything to be moving along smoothly.
"Transactions of this nature and complexity historically take on average nine to 12 months to close from the date of announcement...[but] the process is fluid, and it is not uncommon that timing expectations are adjusted," a Sysco spokesman told the Wall Street Journal.
The proposed $3.5 billion merger agreement, which would give the company 25% of the foodservice market share, is the first of its kind, and the need for the FTC to develop protocols to review a merger of this magnitude is the main source of the delay, according to Sysco.
The Wall Street Journal speculates that the delay could also indicate the need for Sysco and US Foods to divest themselves of some of their assets.
Sysco, however, demonstrated its confidence in the seamless approval of the merger by already announcing the senior executives who will be in charge of the company's operations in the wake of the deal. According to a press release, these executives are:
Speaking about his newly announced team, Sysco President and Chief Executive Officer Bill DeLaney said, "Each of these individuals brings to the job a wealth of customer focus, personal commitment, industry knowledge and professional expertise. I look forward to working with this senior team upon completion of the merger as we continue to pursue being our customers' most valued and trusted business partner."
The hiring annoucements come in the wake of news that longtime Sysco Executive Vice President and President of Foodservice Operations Mike Green will be retiring at the end of the year after a 24 year career with the company.
"Mike has been a strong and impactful leader throughout his 24-year career with Sysco, playing an important role in the development of several of our key leaders," said Bill DeLaney, Sysco President and Chief Executive Officer. "We greatly appreciate his many significant contributions to Sysco's success, and we wish him the best upon his retirement."
While they will doubtlessly miss his leadership and experience, Sysco is confident that its new team has the right skills to lead Sysco into the future, one which looks pretty bright from where I stand.
Stay tuned to DeliMarketTV for any future updates on the impending merger of Sysco and US Foods.