Sysco Buys US Foods for $3.5 Billion, American and US Air Merge

Nichole Harper
09 Dec, 2013
New York City

Monday merger news dominated trading. Given Imaging agreed to $860 million offer from Covidien. Sysco agreed to pay $3.5 billion and assume $3 billion in debt to acquire US Foods. American Airlines emerged from bankruptcy and merged with US Airways.

[R]1:20 PM New York – Monday merger news dominated trading. Given Imaging agreed to $860 million offer from Covidien. Sysco agreed to pay $3.5 billion and assume $3 billion in debt to acquire US Foods. American Airlines emerged from bankruptcy and merged with US Airways.[/R]

Stocks on Wall Street gained and investors weighed better than expected Chinese trade data and slower than previously estimated Japanese economic growth.

S&P 500 index increased 0.3% to 1,809.79 and Nasdaq Composite Index added 0.2% to 4,069.87.

In London trading, FTSE 100 index slid 0.1% or 4.55 to 6,547 and in Frankfurt the DAX index rose 0.3% or 29.58 to 9,202.

In Paris, CAC 40 index fell 0.1% or 3.25 to 4,126.

American Airlines emerged from bankruptcy protection and completed its merger with US Airways.

The newly merged company will be named America Airlines Group Inc and Doug Parker will lead the company.

With the merger four largest airlines will control 80% of domestic air travel market.

U.S. Stocks in Review

Given Imaging Ltd ((GIVN)) soared 25.6% or $6.05 to $29.70 after the diagnostic products maker agreed to be acquired by Ireland-based Covidien Plc ((COV)) for $30 a share in cash for a total of $860 million. The transaction is expected to be completed by March 2014.

Ingles Markets, Inc ((IMKTA)) climbed 5% or $1.18 to $24.86 after the supermarket chain reported net sales in the fourth-quarter ending on September 28 dropped 4.5% to $948.9 million. Net income in the quarter climbed 17.3% to $15.6 million or 68 cents a diluted share compared to $13.3 million or 55 cents.

Layne Christensen Company ((LAYN)) plunged 8.4% or $1.32 to $14.40 after the water and sewage construction solution provider said revenue in the third-quarter ending in October declined 23% to $216.5 million. Net in the quarter swung to a loss $15.8 million or 80 cents a diluted share compared to a net income of $8.5 million or 43 cents.

McDonald''s Corporation ((MCD)) fell 1.3% or $1.30 to $95.50 after the fast-food chain reported U.S. comparable sales in November fell 0.8% and in Europe increased 1.9%. Systemwide sales for the month increased 1.1%.

Sysco Corporation ((SYY)) surged 21.3% or $7.29 to $41.63 after the food distributor agreed to acquire US Foods for about $3.5 billion in stock and cash. The total enterprise value of the transaction is about $8.2 billion and the merger agreement has approved by the board of directors of both the company.

After completion of the transaction, the combined companies are expected to have annualized sales of approximately $65 billion.

WhiteWave Foods Co ((WWAV)) jumped 3.3% or 71 cents to $22.49 after the packaged food and beverage maker agreed to acquire Earthbound Farm from investors including private equity firm Kainos Capital for $600 million.