By Andy Sevilla.
Sysco and US Foods announced the merger of the two food distribution giants on Tuesday in a transaction expected to top $8 billion dollars.
Sysco will pay approximately $3.5 billion for the equity of US Foods and will also take on the company’s net debt, which totals about $4.7 billion, according to a US Foods news release.
The combined company will continue with the Sysco name and headquarters in Houston, the release said. Sysco’s president and chief executive officer, Bill DeLaney, will lead the company.
“As we continue on our transformational journey at Sysco, this transaction will position us to significantly accelerate our progress in achieving the vision
we have for our company: to be our customers’ most valued and trusted business partner,” DeLaney said in a statement.
DeLaney went on to say that Sysco looks forward to welcoming US Foods’ employees, including about 250 workers in the US Foods distribution site in Buda. That center broke ground in September 2010 after exhaustive legal battles, and opened the following year.
Former Buda Mayor Jim Hollis and Buda realtor Christopher Juusola sued the city of Buda in 2009 on behalf of hundreds of residents who signed a petition favoring a special election to overturn or affirm a city council land use change for the distribution site. Ultimately, the Third Court of Appeals ruled that changes in land use plans are not subject to referenda because of a technicality in the city charter. The Texas Supreme Court declined to hear the case.
Once Sysco completes its buyout of US Foods, which is expected to close in the third quarter of 2014, the company expects annualized sales of about $65 billion, the release said.
“Combining and maximizing the significant strengths of two outstanding companies is certain to be of tremendous advantage in supporting our customers as they tackle the challenges of today’s demanding environment,” US Foods president and chief executive officer John Lederer said in a statement.
