Sysco Terminates Merger Deal With US Foods - Quick Facts

(RTTNews) - Sysco Corp. (SYY) announced that it has terminated its merger agreement with US Foods, days after the U.S. District Court in Washington, D.C., granted the Federal Trade Commission's request for a preliminary injunction to block the proposed Sysco-US Foods merger.

The company said this action also terminates an agreement with Performance Food Group or PFG to purchase US Foods facilities in 11 markets.

As per terms of the merger agreement, the termination of the transaction requires Sysco to pay break-up fees of $300 million to US Foods and 12.5 million to PFG.

Sysco's Board of Directors has authorized the company to spend an additional $3 billion to buy back shares over the next two years. The share repurchases will be in addition to the amount normally purchased to offset benefit plans and stock option dilution. The company intends to fund these purchases from new borrowings and cash flow from operations.

The intent is to repurchase approximately $1.5 billion in shares in each of the next two years and, as part of the first year's purchases, the company expects to put in place an accelerated share repurchase program.  Sysco will continue to assess the merits of repurchasing shares over time.