The Federal Trade Commission has blinked.
The regulator was close Wednesday night to voting to block a $3.5 billion food industry merger — but postponed the decision after an intense day of meetings with Sysco, The Post has learned.
Sysco, the No. 1 distributor of food to schools, hospitals and restaurants, is looking to gain FTC approval of its deal to buy the No. 2 distributor, US Foods, amid an outcry that the combined company will yield too much power and will inevitably lead to higher prices.
Sysco is desperately trying to convince the FTC’s five commissioners that cost savings from the merger will allow it to lower prices.
At the same time, it has doubled the amount of assets it will sell to the No. 3 food distributor, Performance Food Group, in an effort to win over the FTC.
The effort appeared to be failing as Wednesday’s 6 p.m. FTC meeting neared. The board was leaning toward suing to block the deal, sources said.
Sysco has told commissioners it is willing to consider “additional flexibility” on providing a remedy, another source said.
That effort seems to have pushed the FTC at least into further thought on the offer as the vote was put off.
“It’s a very high-stakes game,” a source said. “Both sides have tough choices.
“My guess is litigation is still the most likely outcome.”
So far, Sysco has offered to sell 11 US Foods facilities — with annual sales of $4.6 billion, or 21 percent of US Foods’ revenue — to Blackstone’s PFG.
The FTC wants Sysco to divest assets that generate up to an additional $2 billion in revenue.
PFG is interested in buying the additional assets, but Sysco is concerned that it might be more than it wants to sell, said another source.Read the Full Article