Sysco shares plunged after it announced the acquisition of Jetro Restaurant Depot in a US$29 billion (A$42.3 billion) deal to increase its access to independent restaurants in the United States.
Sysco (NYSE: SYY) shares closed $12.50 (15.28%) lower at $69.30, capitalising the largest food distributor in the U.S. at $33.19 billion.
Sysco said it would acquire the family-owned restaurant and food service provider for $21.6 billion in cash, funded by debt and 91.5 million Sysco shares.
The acquisition will allow Sysco to build a close relationship with customers that turn to Jetro for supplies in the higher margin $60 billion to $70 billion per year ‘cash-and-carry wholesale’ channel.
“We’re thrilled to combine two industry leaders to create a preeminent multi-channel food service distribution platform,” Sysco Chair and Chief Executive Officer Kevin Hourican said in a news release.
He said Sysco and Jetro Restaurant Depot would give independent restaurants better access to more affordable, fresh food products and deliver more choice and convenience.
Jetro would benefit from access to Sysco’s foodservice supply chain and logistics capabilities, and Sysco would benefit from new ways to serve local customers.
The combined company would have increased purchasing efficiencies, enabling lower prices for more customers.
“Today’s announcement is an exciting moment for Jetro Restaurant Depot and a clear recognition of the strength of our business model, and the teams who have built it over the past 50 years,” Jetro Executive Chairman Restaurant Depot Stanley Fleishman said.
He said Sysco was the best partner for the next chapter in Jetro’s history because they shared a growth mindset and brought the systems and national and international supply logistics capabilities to help growth across the U.S. and beyond.
The world’s largest food-away-from-home distributor, Sysco operates 337 distribution centres in 10 countries and serves about 730,000 customer locations.
Founded in 1976 by Nathan “Natie” Kirsh, Jetro operates 166 large-format warehouse stores in 35 U.S. states that serve more than 725,000 independent restaurants and food service operators with a broad assortment of fresh and low-priced products.
Sysco also reaffirmed its full-year 2026 guidance.
