US Foods Holding Corp.’s decision to end merger discussions with Performance Food Group (PFG) underscores the distributor’s commitment to accelerating its own ecommerce and technology initiatives rather than pursuing a large-scale integration.
The Rosemont, Ill.-based company said Nov. 24 that both sides mutually agreed to terminate an information-sharing process they launched earlier this year. They also will not pursue a potential combination. At the same time, US Foods reaffirmed its 2025 outlook and reiterated its 2025–2027 long-range plan. It also announced a $250 million accelerated share repurchase along with a new $1 billion authorization.
While the company did not detail operational implications of the halted talks, US Foods’ long-range plan relies heavily on:
- Expanding ecommerce capabilities
- Modernizing online ordering tools
- Improving digital engagement with restaurants and foodservice operators
Why US Foods ended its merger talks with PFG
A merger with PFG would have required extensive systems integration, regulatory review and IT consolidation. Each aspect could have slowed ongoing digital investments.
CEO Dave Flitman said the company’s independent path remains the most compelling.
“Our Board of Directors and the Executive Leadership Team have determined that it is in the best interest of US Foods and its shareholders to terminate discussions,” Flitman said.
He added that the company’s focus on its own operating model has produced “consistent above-market top and bottom-line growth.”
US Foods has reported rising digital-order penetration, increased adoption of mobile ordering and deeper use of data-driven inventory and pricing tools by customers. The company has also been investing in warehouse automation, real-time inventory visibility, and predictive analytics to support ecommerce fulfillment and improve service levels.
Analysts say stepping away from a potential PFG combination removes uncertainty and allows US Foods to keep advancing its technology roadmap. The company’s 2025–2027 plan calls for steady sales growth, adjusted EBITDA expansion and stronger cash flow — metrics closely tied to its ecommerce modernization.
The expanded share-repurchase authorization signals confidence in that trajectory and reinforces the company’s decision to focus on its standalone digital strategy rather than pursue a transformational merger.
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