Sodexo Declines Amid Reports of Potential Aramark Acquisition

Sodexo is exploring a potential acquisition of its U.S. competitor Aramark, according to a report from Bloomberg News, which caused shares of the French food catering company to drop 7.8% on Thursday.

The report indicates that discussions about the deal have been ongoing, with Aramark specializing in food and facilities management services.

Analysts at Barclays pointed out that while there could be strategic benefits for Sodexo in combining operations to enhance U.S. procurement, sales, and branding, they expressed concerns about the financial implications and the feasibility of executing such a large integration.

It remains unclear if these talks will lead to an official agreement. Analysts from Jefferies noted that antitrust issues may arise in certain regions due to market share considerations.

Additionally, any prospective acquisition would likely face scrutiny from antitrust regulators, and Sodexo would need to secure adequate funding for such a substantial acquisition.

Experts from Jefferies emphasized that Sodexo has fallen behind its peers in net new growth recently, suggesting that acquiring Aramark could serve as a valuable growth driver with significant potential synergies.