Sodexo down as reported potential Aramark acquisition weighed on Investing.com
Investing.com – Sodexo (EPA: ) is considering a buyout of US rival Aramark (NYSE: ), Bloomberg News reported late Wednesday, lowering shares of the French foodservice company to 7.8% on Thursday.
The report, citing sources familiar with the situation, said Sodexo is in ongoing discussions about an agreement with Aramark, a food and service management provider.
“There may be some sense in the merger from SW's perspective in terms of developing buy/sell/brands in the US but we are skeptical of the financial and execution potential of the merger,” Barclays analysts said in a note.
However, it is not yet certain that these talks will lead to a formal agreement.
“However, given the market share positions, we suspect that mistrust may be a problem in some regions,” Jeffery analysts said in a note.
Any potential acquisition would also face scrutiny from antitrust regulators, and Sodexo would need to secure the necessary funds for such a significant acquisition, the report said.
“Strategically, Sodexo has lagged new growth at peers in recent years, so Aramark will be a useful growth engine with potentially meaningful synergies,” Jefferies said.
