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Performance Food and US Foods are evaluating a potential $100 billion merger, a deal that could surpass Sysco.
Performance Food Group Co. and US Foods Holding Corp. have reached an agreement to share information on a possible combination that would create a food distribution powerhouse with nearly $100 billion in annual sales.
According to a joint statement, the companies will evaluate regulatory challenges and potential cost savings. Performance Food stressed that the accord does not guarantee a transaction, but it marks a major step forward after months of speculation.
The talks gained momentum after Sachem Head Capital Management, an activist investor, privately nominated candidates to Performance Food’s board and pushed for merger discussions. In recent weeks, Performance Food’s board has spoken with several large shareholders and entered talks with US Foods, signaling a shift in its posture.
Market reaction was immediate: Performance Food shares rose about 5% in premarket trading on Sept. 15, adding to a 23% gain this year, while US Foods shares were little changed after an 18% rise in 2025.
If completed, the merger would vault the combined company ahead of Sysco, which currently dominates the $371 billion U.S. food distribution sector. Analysts at Bloomberg Intelligence have noted that such a deal could control roughly 18% of the U.S. foodservice market, surpassing Sysco’s 17%.
The companies’ strengths would complement each other: Performance Food’s reach in independent restaurants, snacks, and convenience stores could help fill gaps in US Foods’ portfolio, which spans restaurants, schools, and hospitals. “A deal would create meaningful scale and synergies,” Bloomberg Intelligence Senior Analyst Michael Halen said in earlier commentary.
Jerome Washington
The biggest obstacle may come from regulators. The food distribution sector has faced this test before: in 2015, a federal judge blocked Sysco’s $3.5 billion acquisition of US Foods on antitrust grounds, citing risks to competition.
With two of the nation’s top five distributors now evaluating a merger, antitrust scrutiny is almost certain. Analysts also warn that even if efficiencies are realized, US Foods could face short-term margin pressure from integration costs.
Beyond food distribution, the merger would ripple into freight markets. Consolidation could lead to optimized routes, supplier renegotiations, and shifts in freight volumes across LTL, dry van, and reefer markets.
While no deal has been finalized, the Performance Food–US Foods talks represent one of the most significant merger possibilities in food distribution since Sysco’s failed bid a decade ago. If approved, the combination would undoubtedly change both the retail food supply chain and freight operations across the continent.
Source: Transport Topics
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