Carrefour stocks soar on merger talks

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.