Wells Fargo views the Bloomberg report that US Foods (USFD) is weighing an acquisition of Performance Food Group (PFGC) as a reason to be bullish on both stocks. While approval from the Federal Trade Commission would be a hurdle, Wells views the potential transaction as favorable for all shareholders, the analyst tells investors in a research note. The firm says it would “combine two well run companies, add scale, and generate significant accretion.” Wells says 25% premium on Performance Food’s July 10 stock price would yield a $25B deal. It sees over 50% accretion in years three and four and keeps Overweight ratings on both stocks.
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