The largest foodservice supplier in North America, Sysco Corp. (Houston, TX), is buying one of its largest rivals, US Foods, for $8.2 billion (including the debt). Although Sysco was advised by Goldman Sachs (and law firms Wachtell, Lipton, Rosen & Katz and Arnall, Golden & Gregory), the man with the most skin in the game now is legendary fund manager Don Yacktman of Yacktman Asset Management. (YAM owns 6.82% stake in Sysco, valued at $1.05 billion).
Yacktman’s portfolio again shows his thirst for big players in the food and beverages sector. In September 2013, he bought more Coca-Cola stocks (39M shares total) and PepsiCo stocks (27M shares total). But he also owns more of Twenty-First Century Fox (FOXA) than anybody else: 10.6% of the company, or 70M shares. And that’s just his personal account; Yacktman Focused Fund owns 10.7% and Yacktman Fund owns another 10.6%. What does Yacktman choose at the movies–Coke or Pepsi? Or will that kind of question even remain relevant? With the Sysco/US Foods deal, Yacktman has proven he can take two longstanding rivals and make them one monopolistic giant. Will he next agitate in the boardroom for Pepsi to buy Coke? Opinion, Mr. Buffett?