PEABODY — The merger of food distribution giant Sysco Corp. and U.S. Foods may have killed plans for U.S. Foods to move out of Peabody. But whether the Peabody operation survives future consolidation remains to be seen.
The relocation plan would have moved U.S. Foods’ 270 employees in Centennial Park to a former Poland Springs warehouse in Seabrook, N.H., plus have added another 100 jobs there.
U.S. Foods’ plan was announced in September and came as an unwelcome surprise to Peabody officials, who have been hoping to revitalize the industrial park. U.S. Foods had been looking for somewhere to expand for about four years, since there is no room for them to expand where they are.
Seabrook Town Manager Bill Manzi spoke with Jeffrey Barnes, U.S. Foods’ corporate real estate director, following the merger announcement last week and said he got the impression the move to Seabrook was probably not going to happen. Barnes was coordinating the Seabrook expansion.
“In a merger like this, everything is frozen. And I don’t want to say definitively that the deal is off, but as we speak, the deal is suspended,” Manzi said. “As of this point, they won’t be continuing with the process to relocate here.”
Sysco Corp., which is headquartered in Texas, will buy U.S. Foods in a deal with a total transaction value of about $8.2 billion. The venture has been approved by the boards of directors for each company. Sysco president and CEO Bill DeLaney will lead the combined company, which will retain only the name Sysco.
U.S. Foods’ headquarters is in Illinois.
“From what I read, with this merger they’re looking to make $600 million in back-end savings,” Manzi said. “That kind of savings means the consolidation of locations and the elimination of jobs and redundancies.”
Manzi noted that Sysco has a distribution center right over the border in Maine and one in (Massachusetts). “That could mean that U.S. Foods’ Peabody warehouse will close,” he suggested.
However, given that Sysco and U.S. Foods are ranked No. 1 and No. 2 in the nation’s food distribution network, Manzi said the Federal Trade Commission will have to approve the merger to ensure it doesn’t create a monopoly.
The two companies distribute food to restaurants, hotels, hospitals, schools and other institutions.