Business briefs: FTC blocks grocery merger
CHICAGO – Federal regulators ignored many local competitors in its claim that the proposed merger of Sysco and US Foods would significantly reduce competition and raise prices, lawyers for Sysco argued Friday.
Sysco’s lengthy attempt to buy US Foods for $3.5 billion was dealt a blow Thursday when the Federal Trade Commission, on a 3-2 vote, sought to block the deal along with 11 attorneys general.
The FTC claimed the takeover would violate antitrust laws by significantly reducing competition nationwide and in 32 local markets.
In the Chicago area, for example, Sysco and US Foods together control 83 percent of the market for local and regional customers, the lawsuit alleges.
The agency will seek a temporary restraining order and a preliminary injunction to prevent the deal from closing.
During a news conference Friday, Sysco lawyers took issue with the FTC’s claim that combined Sysco-US Foods would have a 75 percent share of the U.S. market for what it calls broadline distribution services, or distributing food products with frequent and flexible delivery, customer service and other services such as menu planning.
Investment jobs fall 1 percent
Wall Street is shrinking.
The number of investment bankers, traders, researchers, sales people and other frontline producers fell for the fourth straight year as tighter regulations and sluggish markets continued to pinch the world’s 10 largest investment banks, a new study found.
The study, by London-based consulting firm Coalition Ltd., found the number of so-called “front-line producers” ticked down 1 percent in 2014 to 51,600 from a year earlier. Employment on Wall Street (and at the big European banks) is down 15 percent from 60,800 in 2009.
The falling employment is part of a broader transformation of Wall Street and the investment banking business generally after the financial crisis of 2008, which ushered in an era of tighter regulation and higher capital requirements and drastically reduced the banks’ once-roaring business of trading stocks, bonds and other instruments.
Spice maker buys Italian firm
BALTIMORE – McCormick & Co. Inc. is expanding in Europe with the acquisition of top Italian spice-maker Drogheria & Alimentari for $97 million, the Baltimore-area company announced Friday.
The 135-year-old, privately held D&A, which makes branded and private-label products, enjoys about a third of the spice and seasoning market in Italy and will give McCormick a strong foothold in that country, the company said.
D&A’s sales reached about $57 million last year, with most of its business in Italy, though exports to 60 countries make up about a fifth of sales. D&A, which has a manufacturing plant in Florence and about 120 employees, marks McCormick’s first acquisition in Italy.
“We anticipate strong growth for these premium products, particularly in the U.S. and key international markets where consumers are seeking unique and authentic ethnic flavors,” said Alan Wilson, McCormick’s chairman and CEO, in the company’s announcement. “The owners and employees of D&A have built a great business.”
McCormick will make an initial cash payment of about $57 million, with an additional “earn out” payment of up to $40 million in 2018 based on the Italian company’s performance.
Shares of McCormick were trading at $75.84 Friday afternoon, up 55 cents, on the New York Stock Exchange.