Sysco says US Foods purchase delayed

Food distributor Sysco Corp said it did not expect to complete its acquisition of US Foods this year and it was still in talks with U.S. antitrust regulators to secure an approval for the deal.

Shares of Sysco, which also reported better-than-expected quarterly sales and profit, fell 3 percent in early trading.

The Federal Trade Commission has been closely reviewing the deal as the two companies are the only ones with geographic reach to offer nationwide contracts for a wide range of goods to customers ranging from hotel chains to fast food restaurants.

'Given the amount of work remaining, and considering the upcoming holidays, the company does not currently expect to complete the transaction before the first quarter of 2015,” Sysco said in a statement on Monday.

Sysco said in December 2013 that it would buy US Foods for about $3.5 billion from its private equity owners, including KKR & Co.

US Foods operates a distribution center at 3550 Second St. in Coralville after its 2012 acquisition of Hawkeye Foodservice Distribution.

The deal, which will combine the top two U.S. food distributors and create a company commanding at least a quarter of the $235 billion North American market, was earlier expected to be completed before October.

Reuters reported last month that Sysco was trying to craft a package of potential asset sales to get approval for the deal and was in talks with three big regional players - Reinhart Foodservice, Performance Food Group and Gordon Food Service - for these assets.

Reinhart Foodservice operates a distribution center at 4100 44th Ave. SW in Cedar Rapids.

Sysco said on Monday its net profit fell to $278.8 million, or 47 cents per share, in the first quarter that ended Sept. 27 from $285.6 million, or 48 cents per share, a year earlier. Sales rose 6.2 percent to $12.45 billion.