Performance Food Group Company and US Foods Holdings announced that they are ending their merger discussions, a decision that follows a thorough review of regulatory hurdles and potential synergies. The two distributors had been exploring a combination that would have created a $100 billion‑sales entity capable of challenging Sysco for the top spot in the U.S. food‑service market.
PFG reaffirmed its financial outlook for the second quarter of fiscal 2026, projecting net sales of $16.4 billion to $16.7 billion and adjusted EBITDA of $450 million to $470 million. For the full fiscal year 2026, the company expects net sales of $67.5 billion to $68.5 billion and adjusted EBITDA of $1.9 billion to $2.0 billion. The guidance reflects confidence in the company’s diversified Foodservice, Convenience and Specialty segments, and is supported by a strong first‑quarter performance that reinforced the board’s belief in a standalone growth strategy.
US Foods confirmed its fiscal‑year 2025 outlook and reiterated its 2025‑2027 long‑range plan. The company also announced a $250 million accelerated share‑repurchase agreement and a new $1 billion share‑repurchase authorization, underscoring a commitment to returning capital to shareholders while pursuing organic growth.
The termination keeps the competitive landscape unchanged: Sysco remains the largest distributor, and PFG and US Foods continue to compete independently. A combined entity would have surpassed Sysco in revenue, but antitrust concerns and integration challenges ultimately outweighed the anticipated synergies.
Investor reaction to the announcement was muted, indicating that the market accepts the companies’ decision to focus on their independent strategies. The outcome suggests confidence in the standalone fundamentals of both firms and a belief that each can pursue growth without a merger.
The decision signals that PFG and US Foods are prioritizing their own strategic paths and capital allocation plans. While the merger will not materialize, the companies remain poised to pursue future opportunities that align with their long‑term value creation objectives.
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