What's with the British papers these days? It's getting to seem like the country's famously wild-eyed tabloid press culture has begun to invade the realm of business reporting.
Last week, the story (reported by London's Business newspaper) was that American tech powerhouse Cisco Systems (NASDAQ:CSCO) was interested in buying Finland's Nokia (NYSE:NOK). Sunday evening, London's The Mail on Sunday broke the "news" that Wal-Mart (NYSE:WMT) is negotiating to buy France's Carrefour hypermarket chain.
As with the Nokia/Cisco story, the paper in question cited unnamed sources to back up its reporting and kept the details vague. Also as with the Nokia/Cisco story, "reliable" news outlets such as Reuters (NASDAQ:RTRSY) initially reported the rumors without commentary. And finally, as with the Nokia/Cisco story, the target of the supposed acquisition quickly denied the existence of any such talks. Carrefour stated categorically: "There are no discussions between Carrefour and Wal-Mart." For its part, last week, Nokia termed the rumors of its acquisition "pure fabrication."
Where the differences between the two stories lie is primarily in the area of novelty. The idea of Nokia joining Cisco was nearly as novel as it was ridiculous. On the other hand, speculation over a Wal-Mart/Carrefour merger has bubbled up from time to time for over a year. In fact, it's been said that Wal-Mart actually did try to negotiate a buyout as long ago as 1999, when the Arkansan retailer also looked at France's Auchan supermarket chain as a potential takeover target.
A Wal-Mart buyout of Carrefour at least has the virtue of making some sense. For one thing, there remains a France-sized hole in Wal-Mart's coverage of the European market, where the company already operates in EU powerhouses Britain and Germany. For another, Wal-Mart and Carrefour do have an historical connection: Decades ago, Wal-Mart founder Sam Walton reportedly first got the idea for developing his chain of everything-under-one-roof superstores from Carrefour itself.
Fool contributor Rich Smith owns shares in Nokia but in none of the other companies mentioned in this article. He has attempted for years to correctly pronounce "Carrefour," but every time he tries, the word comes out sounding like a sneeze. The Motley Fool has a disclosure policy.
