The Federal Trade Commission (FTC) is weighing an antitrust lawsuit against the $3.5bn merger of Sysco and US Foods which was announced in December.
FTC has been investigating the proposed merger, which according to it, has the potential to threaten competition, reports The Wall Street Journal.
Both companies buy food and supplies such as napkins and cutlery from manufacturers and sell to restaurants, schools and other institutions.
If merged, both companies would make up more than 25% of the $231bn U.S. food-distribution industry.
Sysco and US Foods believe that the merger will aid them to reduce costs, enhance purchasing power and improve customer service.
The FTC is considering other options such as divestment of assets to competitors by both firms. The commission is yet to decide whether to challenge the deal and a decision may come within weeks.
