In mid-2015, food distributor Sysco called off a planned $3.5 billion merger with U.S. Foods. Regulators killed the deal as the Federal Trade Commission filed a lawsuit that said it would have given the combined company 75% of the national market for distribution services. The failed merger was hard to digest: Sysco had to pay a $300 million break-up fee to walk away from the agreement. And for the first nine months of 2016, sales were flat at $36.7 billion. Sysco also announced a three-year plan in February 2016 to cut 2% of its workforce and invest more aggressively in technology. U.S. Foods, meanwhile, pivoted with a recent initial public offering that raised around $1 billion.
News about Sysco
They may contain listeria.
The deal is one of several that antitrust enforcers have recently rejected as illegal.
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Execs argue that buybacks are a sign of faith in a company's stock, but the data say investors should beware of firms purchasing its own shares.