Tesco (LON:TSCO) has formally entered into an alliance with France’s Carrefour, the blue-chip supermarket has said. The news comes after the companies unveiled the deal earlier this year, with the agreement set to cover the companies’ relationship with global suppliers, the joint purchasing of own brand products and goods not for resale.
Tesco’s share price has climbed into positive territory in today’s session, having added 0.39 percent to 260.50p as of 09:34 BST. The stock is marginally outperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.09 percent higher at 7,665.92 points. The group’s shares have added more than 44 percent to their value over the past year, as compared with a near two-percent rise in the Footsie.
Tesco-Carrefour deal update
Tesco and Carrefour announced in a statement today that they had formally entered into a long-term, strategic alliance. The deal, which is set to cover the strategic relationship with global suppliers, the joint purchasing of own brand products and goods not for resale, will be governed by a three-year operational framework. Following today’s announcement, the companies expect the alliance to become operational in October.
The companies have agreed the tie-up amid an ongoing grocery price war in the UK which has seen German discounters Aldi and Lidl pressure profits at the ‘Big Four’ supermarkets.
Today’s update comes after the tie-up recently attracted the attention of France’s competition watchdog.
Analysts on FTSE 100 grocer
The 16 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 275.00p on the shares, with a high estimate of 300.00p and a low estimate of 200.00p. As of August 3, the consensus forecast amongst 22 polled investment analysts covering the blue-chip group has it that the company will outperform the market.