Sodexo’s Consideration of Aramark Acquisition

Investing.com — Sodexo (EPA:EXHO) is considering a possible acquisition of its U.S. competitor Aramark (NYSE:ARMK), as reported by Bloomberg News late Wednesday. This news caused shares of the French food catering company to drop by 7.8% on Thursday.

According to sources familiar with the situation, Sodexo has been engaged in ongoing discussions about the potential deal with Aramark, which specializes in food and facilities management.

“There may be logic in a combination from SW’s perspective in boosting its US procurement/sales/brands but we question the financials and execution of such a potentially large integration,”
said analysts at Barclays.

The chances of these discussions leading to a formal agreement remain uncertain.

“However, given market share positions, we suspect anti-trust may be an issue in some regions,”
noted analysts from Jefferies.

Any potential acquisition would face scrutiny from antitrust regulators. Additionally, Sodexo would need to secure the necessary funds for this significant purchase.

“Strategically, Sodexo has lagged peers’ net-new growth in recent years, so Aramark would be a helpful growth engine with likely meaningful synergies,”
Jefferies added.