Is Amazon (NASDAQ:AMZN) about to take over another grocery chain? That question is on many investors’ minds today as rumors swirl that the e-commerce and technology giant is targeting Ocado Group (OTCMKTS:OCDDY).
Ocado is a U.K. digital grocery innovator that has been using automation technology to change how consumers shop for food. OCDDY stock hasn’t moved much this month, but today shares are surging as speculation mounts over an Amazon takeover.
Amazon may not be the only potential buyer, however. According to reports, multiple U.S. companies have expressed interest in acquiring Ocado. Details are still emerging regarding a potential deal, but neither Amazon or Ocado have issued statements about the news.
What’s Happening With OCDDY Stock?
While investors wait to learn more, OCDDY stock is enjoying a day of gains. As of this writing, shares are up more than 30% for the day. While the stock hasn’t seen much movement in the past month, it has been slowly rising since the beginning of June. That said, shares are also down 6% for the past six months, even as investor enthusiasm for artificial intelligence (AI) grows.
It makes sense that interest in Ocado is high. The company has done an excellent job of leveraging automation technology in its operations providing digital grocery services. Amazon has a proven interest in the field as well.
In 2017, Amazon acquired popular supermarket chain Whole Foods. Adding Ocado’s tech could help the company further revolutionize its grocery services. The tech giant is also heavily invested in expanding its AI operations. Expansion often means making strategic acquisitions.
Additionally, taking over a popular European brand like Ocado could help Amazon gain further share of the U.K. market. While The Times reports that other potential buyers have expressed interest in OCDDY, it would be hard for most companies to win a bidding war against Amazon.
If a deal is to close, it would likely be a positive catalyst for both AMZN stock and OCDDY stock. Both names are likely to keep rising in the short term.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
