Sysco's planned US$3.5B merger with US Foods could be justified to regulators through valuation of Jetro Holdings, which recently bought back shares in a deal valuing company at about US$9B, analysts say

Nevin Barich

LOS ANGELES , May 6, 2014 (Industry Intelligence Inc.) – Analyts say that Sysco Corp.'s planned US$3.5 billion merger with US Foods Inc. could be justified to regulators through the valuation of Jetro Holdings LLC, which recently bought back shares in a deal valuing the company at about $9 billion, The Wall Street Journal reported May 5.

Analysts say Jetro's Restaurant Depot LLC and small specialty suppliers are increasing competition for US Foods and Sysco, which saw operating profits shrink to 3.7% in its fiscal year through last June, from 5.3% in fiscal 2010. However, Sysco and US Foods have $65 billion in combined annual sales, while Jetro sees about $8 billion in annual sales.

The primary source of this article is The Wall Street Journal, New York, New York, on May 5, 2014. Click here to read the primary source's full version of the article.

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