Performance Food Group, US Foods end merger talks

Core Viewpoint - Performance Food Group and US Foods have ended merger talks that would have created the largest domestic foodservice company in the U.S. [1] Group 1: Company Overview - Performance Food Group operates approximately 155 distribution centers and has a fleet of over 6,000 tractors [1] - US Foods operates over 70 distribution centers and also has a fleet of over 6,000 tractors [1] - A merger would have resulted in a combined market capitalization exceeding $30 billion, making it a strong competitor to Sysco, which has a market cap of $36 billion [2] Group 2: Financial Performance - Performance Food Group reaffirmed its fiscal 2026 guidance, projecting net sales between $67.5 billion and $68.5 billion, with adjusted EBITDA ranging from $1.9 billion to $2.0 billion [3] - US Foods reiterated its fiscal 2025 outlook, targeting 5% annual net sales growth and 10% adjusted EBITDA growth [6] - US Foods announced a new $1 billion share repurchase agreement alongside a $250 million accelerated share repurchase plan [6] Group 3: Strategic Decisions - The decision to terminate merger discussions was influenced by a thorough analysis of potential synergies and regulatory considerations [5] - PFG's Board of Directors believes that executing its standalone strategic plan is the best path to long-term stockholder value [3] - US Foods was prompted to explore a merger by activist investor Sachem Head Capital Management [4]