Sysco Corp. dropped its planned acquisition of rival US Foods Inc. following a federal judge’s ruling against the deal, forcing the food-distribution giant to find a new strategy for its future that is likely to include smaller acquisitions.

Sysco, the nation’s largest purveyor of food and other supplies to restaurants and cafeterias, had been working on the merger for more than a year and a half when US District Judge Amit Mehta in Washington on last week issued a preliminary injunction to stop the deal on concerns it could hurt competition.

The federal Trade commission had filed a lawsuit in February challenging the transaction on antitrust grounds.

Effectively, the judge’s comments are expected to scuttle the deal. A redacted public version of the ruling will be released on Friday.

It had even proposed to sell off $2 billion worth of assets to the third biggest food distributor, Performance Food Group (PFG) in order to address these concerns, however, it was not considered to be sufficient enough to replace the competition.

Lawyers for the FTC and the two companies are all set to face off in an administrative hearing beginning on July 21 in order to determine whether the merger would violate anti-trust laws.

John Lederer, CEO of USA Foods, expressed his company’s commitment to carrying on despite the ruling. Sysco has said only that it will look at the merits of terminating the merger agreement, but The New York Times quoted USA Foods is saying that any legal block from the federal court would cause it to abandon the merger.

It has been said that the board of directors of Sysco will work collaboratively with the primary owners of USA Foods on the matter.

Stock of Office Depot also weakened 2.4% to close at $8.89 per share. Sysco Chief Executive Officer Bill DeLaney said the company was very much disappointed with the ruling.