Share Prices & Company Research

Market News

07 Jun 2021 | 09:16

Tesco and Carrefour will not renew their purchasing alliance

(Sharecast News) - French supermarket group Carrefour and UK retailer Tesco announced on Monday that they would not extend their purchasing alliance. In a joint statement, the two companies said that they had "decided not to extend their purchasing alliance beyond the three-year operational framework agreed in 2018".

Both companies added that they "benefited from a number of joint buying opportunities". However, "both companies have agreed that they will continue this work independently and focus on their own opportunities, building on the experience and the progress made during the alliance period".

The alliance, which was agreed so as to provide greater choice and lower prices to customers, was set to last until the end of 2021.

According to Shore Capital Markets analyst Clive Bank, "for whatever reason, regulatory, cultural, and operational, there would appear to be little notable benefit from the alliance on an ongoing basis."

Black had questioned whether he would ever be able to find evidence the benefits of the alliance on the two companies' financial statements as far back as 2018.

"Whilst all this is so, it will remain an open question, and no doubt one that M&A bankers will be repeatedly exploring, as to whether Carrefour and Tesco could ever more formally merge to the benefit of more than the advisory teams.

"Their respective categories and geographies remain very complementary, especially given Tesco's retrenchment over the past decade, with the British Isles remaining an efficient and substantial market of approaching 70m shoppers," Clive Black said.

Tesco's shares were up 0.5% at 226p on Monday morning.
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 7th October 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.