Food distributor Sysco Corp's executives are in talks with the U.S. Federal Trade Commission to salvage the company's attempt to buy its smaller rival US Foods Inc, the New York Post reported.
The Wall Street Journal reported last month FTC was mulling an antitrust lawsuit against the deal.
The antitrust concerns focus on whether the merger will drive up costs for thousands of restaurants, hospitals and hotels that the companies supply on nationwide contracts.
The regulatory body is expected to reach a decision by Oct. 31 on whether to block the deal, the newspaper reported, citing sources. (bit.ly/1CgoMMA)
Sysco told Reuters talks with the commission were ongoing.
"We continue to engage in productive discussions with the FTC and other stakeholders regarding our merger with US Foods. We are confident that those discussions will lead to completing the merger in the fourth quarter of this year," said Sysco spokesman Charley Wilson.
Sysco in December offered $3.5 billion to buy debt-ridden US Foods from its private equity owners in a deal that would combine the top two U.S. food distributors and create a company commanding at least a quarter of the $235 billion North American market.
Two sources knowledgeable about talks between the companies and the FTC told Reuters that no decision to file a lawsuit to stop the deal had been made.
Sysco has said it would limit any divestitures in the deal to $2 billion in revenues, and that it would be able to save money with fewer warehouses and fuller trucks, and thus drive out costs.
The FTC declined comment.
