D.E. Shaw owns a stake exceeding $1 billion in Sysco (SYY.N), two sources familiar with the matter said on Thursday, hours after the world's biggest food distributor said it will refresh its board to help speed up growth.
New York-headquartered D.E. Shaw, one of the world's biggest hedge funds, has been invested in Sysco for a decade, but the size of its current stake in the Houston-headquartered company, which is valued at $40 billion, has not been previously reported.
Sysco did not immediately respond to a request for comment.
Sysco will add two directors with experience in technology, e-commerce and food service distribution to the board next month. The company is pushing to speed up its use of AI to improve operational performance and boost its share price. Industry analysts have said AI can help food distribution companies by predicting demand, automating order processing and streamlining logistics.
Despite forecasting strong annual results this month, Sysco's stock price has climbed less than 4% in the last 12 months as the company grapples with rising food and transportation costs and budget-conscious consumers.
SYSCO SEEKS SAVINGS FROM AI
The company has said it expects $100 million in savings from AI, automation and process improvements in fiscal 2027, and said on Thursday that D.E. Shaw has helped speed up its use of AI solutions.
"As long-term shareholders, we are excited to partner with Sysco in support of its AI transformation and confident in the value creation opportunities ahead, including the Restaurant Depot acquisition," D.E. Shaw managing director Michael O'Mary said in a statement.
The firm is also expected to help raise capital to finance Sysco's planned acquisition of Jetro Restaurant Depot.
Food distribution companies have caught the attention of activist hedge funds in recent years, with Sachem Head Capital Management pushing Performance Food Group (PFGC.N) last year to consider merging with rival US Foods Holding Corp (USFD.N).
D.E. Shaw, which invests some $100 billion in assets on behalf of clients, describes itself as an investment and technology development firm. The firm has occasionally pushed for changes at companies including gases and chemicals company Air Products, bitcoin miner Riot Platforms (RIOT.O), data analytics provider Verisk (VRSK.O) and transportation company FedEx (FDX.N).
