Sysco buys US Foods

For those of us on the supply chain side of things, this is a VERY big deal. Lot's of interesting things could be coming down the pike in the next 18 months or so once the ink gets dry on this deal....



http://www.reuters.com/article/2013/12/ ... GZ20131209

[Robin Garr]

Lots of interesting things could be coming down the pike in the next 18 months or so ...

What kinds of developments do you see coming, Dan?

"Sysco, which will assume US Foods' debt of $4.7 billion, said it expected about $600 million in annual cost savings within three to four years."

For starters, It would probably be safe to assume that this savings will most likely come through consolidation of several redundant positions at both companies. So a lot of people will probably lose their jobs
Also, some of the smaller regional distributors might consolidate as well (like the recent Reinhart-Southern Foods merger) to keep from getting swallowed up by the very big fish.

The article also hints that price increases could be on the way now that another competitor has been absorbed into the collective.

Which is what we need.

The article also hints that price increases could be on the way now that another competitor has been absorbed into the collective.

Which is what we need.

Yeah that would stand to reason. I wonder what even smaller distributors like Thomas Meats will feel.

It's a great time for competitors like GFS. If you can win the price war, you can topple even the biggest giant. Were I a rival distributor I would be working to get my prices low and bolster my customer service like there is no tomorrow.

Anytime you see the words "private equity"....You KNOW a bunch of jobs are getting flushed down the toilet.

Anytime you see the words "private equity"....You KNOW a bunch of jobs are getting flushed down the toilet.

That's the case when a private equity firm buys a company but in this case a private equity firm is selling a company (US foods) to a company who knows that business very well (Sysco). While I'm sure there'll be some consolidation of positions it won't be nearly as bad as if a private equity firm with buying out a company.

Anytime you see the words "private equity"....You KNOW a bunch of jobs are getting flushed down the toilet.

That's the case when a private equity firm buys a company but in this case a private equity firm is selling a company (US foods) to a company who knows that business very well (Sysco). While I'm sure there'll be some consolidation of positions it won't be nearly as bad as if a private equity firm with buying out a company.

Which in this case means the "Private Equity" owners had already shed a boatload of jobs (under the likely guise of "returning the company to profitability") and -now- they're selling it to another company who will likely shed MORE jobs... Regardless of how one interprets it, I can just about guarantee two things (A) a few people got rich/er off of a lot of other peoples hard work....and (B) a lot of people had their retirement accounts raped.