Casino, whose credit rating was cut to junk by Standard & Poor’s in March 2016, is under pressure to revive profits in France, its biggest market, where it now makes more than 50 percent of its sales, at a time of slower growth in Brazil.
The planned takeover of Sarenza, which had sales of more than 250 million euros (221.46 million pounds)in its last fiscal year, follows an e-commerce deal between Casino and Ocado (OCDO.L).
Shares in Casino rose 1.3 percent, outperforming a weaker overall Paris market .SBF120 on Monday as investors welcomed the news of the planned Sarenza deal, although the stock remains down by around 9 percent since the start of 2018.
The company’s shares had fallen sharply in January after it reported weak fourth-quarter sales.
“Casino’s plans to strengthen its digital presence are a sound strategy, although we will have to see how the company integrates it all,” said Meriem Mokdad, fund manager at Paris-based Roche Brune Asset Management.
Mokdad said her firm did not own Casino shares as it wants more evidence of a turnaround at Casino before investing.
Earlier this month, Amazon announced plans to create 2,000 new jobs in France, a further sign of the U.S. online giant’s ambitions to grow there.
France’s traditional supermarket operators such as Casino, sector leader Carrefour (CARR.PA) and privately-held firm Leclerc have all taken steps to respond to the Amazon threat.
Leclerc announced the launch of a food delivery service in Paris last month, while Carrefour struck a partnership in China with Tencent (0700.HK) and said it would boost its investments in the sector.
Reporting by Sudip Kar-Gupta; Editing by Gopakumar Warrier/Louise Heavens/Alexander Smith