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CFO of Texas-based Sysco to lead merger of US Foods

On Jan. 14, the chief executive officer of Sysco Corp. announced that the Houston company's chief financial officer would be the point man in executing the merger between Sysco and their recently purchased rival, US Foods. The largest food service distributor in the country said in December that it would be paying $3.5 billion to buy out the second-largest distributor. Sysco's CFO praised the integration of the two companies as the best of both worlds, saying that it would increase stockholder value while also creating greater synergies in Sysco's operations.

Before any synergy could be realized, however, federal regulators needed to approve the plan, a process that could take six to nine months. Should the deal gain regulatory approval, however, Sysco would be on track to generate $65 billion in revenue every year. The company said that it expected to save at least $600 million in the merger by eliminating any redundant operations but had not released any information regarding how many jobs might be lost nationally due to the merger. At the time of the buyout announcement, Sysco employed 2,700 people in Houston, and US Foods employed 300 in the city.

As the biggest food distributor in the U.S., Sysco serves healthcare facilities, restaurants, hotels and educational institutions by selling, marketing and distributing food products. The company brought in roughly $44 billion in sales before the merger, with US Foods listing about half that amount of income.

Complex business transactions, such as mergers and acquisitions, require sound corporate strategy combined with business law understanding. Whether a company is looking at a friendly acquisition or a hostile one, the process of acquiring a new business may be executed most efficiently with the assistance of a legal professional.

Source: Houston Chronicle, "Sysco financial chief to lead integration efforts in US Foods deal", David Kaplan, January 14, 2014

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