Carrefour stocks soar on merger talks

Photo: AP

The shares of the based in France European retail giant Carrefour surged by some 13 percent on Wednesday, as the company was approached for merger by Canada’s convenience-store operator Alimentation Couche-Tard, Reuters reported. The bid was unexpected and lead to a sharp rise in demand for the stocks.

European supermarket groups have been expected to seek strategies to counter growing competition from online rivals such as Amazon, though Couche-Tard’s announcement that it has initiated exploratory talks with Carrefour raised analyst questions over the potential for cost or purchasing savings.

Couche-Tard, which is mainly focused on gas stations in North America, would be entering virgin territory with Carrefour. Continental Europe’s biggest retailer has operations across Europe and Brazil, including its out-of-town hypermarkets.

Couche-Tard has mainly made smaller acquisitions in the past, though it was reported to be a potential suitor for Marathon Petroleum Corp’s Speedway gas stations last year before another buyer sealed a $21 billion deal. There is no certainty at this stage that these discussions will result in any agreement or transaction, Couche-Tard said.

The market value of Carrefour is estimated at 16.2 billion euros. The company employs more than 320,000 people worldwide, including 105,000 in France, its largest market.

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