Investing.com — Sodexo (EPA:) is considering a potential takeover of U.S. competitor Aramark (NYSE:), Bloomberg News reported late Wednesday, sending shares of the French catering company down as much as 7.8% on Thursday.
The report, citing sources familiar with the situation, said Sodexo has been in ongoing talks about the deal with Aramark, a food and facilities management provider.
“There may be logic in a combination from SW’s perspective to boost its US buying/selling/branding, but we question the financials and execution of such a potentially large integration,” Barclays analysts said in a note.
However, it remains unclear whether these talks will lead to a formal agreement.
“However, given market share positions, we suspect antitrust laws may be an issue in some regions,” Jefferies analysts said in a note.
Any potential acquisition could also face scrutiny from antitrust regulators, and Sodexo would need to secure the necessary funding for such a significant purchase, the report added.
“Strategically, Sodexo has lagged its peers in terms of net new growth in recent years, so Aramark would be a useful growth driver with likely significant synergies,” Jefferies added.