Performance Food Group, US Foods Call Off Merger Talks
Combined Company Was Projected to Be Largest Food Service Carrier
Key Takeaways:
- Performance Food Group and US Foods ended merger talks Nov. 24 after entering an information sharing agreement Sept. 16.
- The deal would have created the largest food service carrier, but both companies cited regulatory and synergy concerns in deciding to remain independent.
- US Foods plans a $1.25 billion share buyback and PFG faces continued pressure from activist investor Sachem Head as both firms pursue standalone strategies.
[Stay on top of transportation news: .]
Performance Food Group and US Foods called off merger talks Nov. 24.
PFG ranks No. 4 on the Transport Topics Top 100 list of the largest private carriers in North America and operates five of the top 21 food service carrier brands.
The five are Performance Food Service, Core-Mark, Vistar, Cheney Brothers and Merchants Foodservice.
US Foods ranks No. 5 on the private carrier Top 100 and No. 2 among food service carriers.
Had the deal gone ahead, the combined entity would have leapfrogged Sysco Corp. at the top of the food service carrier table — serving restaurants, corporate offices, convenience stores, gas stations and truck stops.
PFG and US Foods entered into an information-sharing agreement Sept. 16 but mutually agreed to dissolve discussions Nov. 24.
“Following a comprehensive evaluation of regulatory considerations and synergies related to a potential business combination with US Foods, with the assistance of our independent financial and legal advisers, we have decided to terminate discussions,” said PFG CEO George Holm.
“Our board of directors is unanimous in its belief that the clearest and best path to long-term stockholder values is executing our stand-alone strategic plan, leveraging our diverse business segments to drive consistent revenue and profit growth.”
US Foods ranks No. 5 on the private TT100. (Seth Clevenger/Transport Topics)
Similarly, Holm’s counterpart at US Foods, Dave Flitman, said: “We have completed our thorough analysis, including synergies and regulatory considerations, of the potential benefits of a combination with PFG. While we are pleased to have engaged in this exploratory process together, our board of directors and the executive leadership team have determined that it is in the best interest of US Foods and its shareholders to terminate discussions regarding a potential combination.”
“We have concluded that our best path to long-term value creation is executing our long-range plan, including our disciplined capital allocation framework,” Flitman said in a separate statement to Holm.
US Foods initially was the aggressor in the proceedings, but now the company plans to spend its war chest on a combined $1.25 billion share buyback program.
Rosemont, Ill.-based US Foods first emerged as a potential suitor for PFG in July, but the attention received short shrift from PFG’s leadership.
Executives at Richmond, Va.-based PFG moved on and were looking elsewhere on the merger-and-acquisition front by the time of the company’s fourth-quarter 2025 earnings call Aug. 13.
Want more news? Listen to today's daily briefing above or go here for more info
“We feel good about what we have going on right now. We have some nice conversations, some that are actionable. Nothing that I would call in our history, that I would call significant in size. But it is a great market today. I mean, there is a great amount of opportunity,” Holm told analysts.
PFG bought Riviera Beach, Fla-based Cheney Brothers in August 2024 for $2.1 billion and Core-Mark in May 2021 for $2.5 billion.
But activist hedge fund Sachem Head disagreed with the decision to turn down US Foods’ approach, nominating four candidates to the PFG board in a shot across the management team’s bow. Subsequently, Sachem Head founder Scott Ferguson was appointed to PFG’s board Sept. 23.
“We appreciate the positive dialogue we have had with PFG’s board and management. I look forward to serving on the board and helping to identify the best value-enhancing path forward for all shareholders,” Ferguson said in a statement accompanying the announcement.
PFG and US Foods began talks a week earlier.
