Swedish retailer ICA Gruppen said that it was in talks with Lithuania's Palink over a potential acquisition of its IKI chain in a statement on Friday, confirming local news reports.
It emphasised that no agreement had been made and that any further information would be published when available.
Palink is the second largest food retailer in Lithuania, while ICA Gruppen is the fourth largest. A merger of the two could raise some antitrust issues in some states, according to Barclay Capital Inc.
Barclay's analysis decreed that 'a potential acquisition of Palink would have a relatively limited impact for ICA as it represents less than 6% of its total sales. We believe the main rationale for this possible acquisition would be to generate scale savings, enabling ICA to compete more efficiently against Lidl in Lithuania."
Like-for-like sales fell by -3.0% in the third quarter after Lidl's entry into the Lithuanian market in the summer, after +2.7% in Q2 and +6.1% in Q1, it added.
ICA Gruppen's net sales showed a slow increase in Q3 of this year, posting a 0.9% increase.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.