There's a very good chance that you've eaten something that has been pushed or pulled around by Sysco or U.S. Foods, two of the nation's biggest food distributors. And in the largest food-distribution deal in a decade, Sysco—which is the No. 1 distributor to U.S. restaurants—announced this morning that it would acquire U.S. Foods for $35 billion, which, if approved, would create a food supply chain of approximately $65 billion in annual sales.
Quite simply, the two companies catered to the same customers, and Sysco announced that it expected to generate cost savings of at least $600 million after three to four years, coming from supply chain efficiencies and merchandising.
The combined company will have unprecedented leverage to sell and distribute foods to restaurants, hospitals, hotels, schools and many of the nation's other institutions. Sysco alone has about 425,000 customers.