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Shares in French retailer Casino rally after Amazon deal

PARIS, March 27 (Reuters) - Shares in French supermarket retailer Casino surged higher on Tuesday after its Monoprix grocery store chain agreed to sell products via Amazon , in a deal that will reverberate throughout the French food retail industry.

Casino shares were up 5.1 percent at 39.46 euros in early session trading, as some traders and analysts speculated that the initial partnership with Amazon could lead to a bigger deal later on.

Casino and Amazon said late on Monday that groceries sourced from Casino's Monoprix supermarket division will be available in the Amazon Prime Now app and website through a dedicated virtual store.

"Who knows if this partnership may be the first sign of a closer collaboration in future between the two companies," said Tangi Le Liboux, analyst at French brokerage Aurel BGC.

Casino's deal with Amazon also follows a delivery partnership signed last year with UK online retailer Ocado .

Since Amazon agreed last year to buy grocery chain Whole Foods Market Inc for $13.7 billion, expectations that it could focus next on Europe have spurred French retailers to try and improve their own online offerings.

Leclerc, France's biggest food retailer by market share, privately held operator Systeme U and Casino were all linked in recent months with Amazon, which has steadily been building its presence in France. It has run its Amazon Prime Now delivery service in the French capital since 2016.

Casino's rival Carrefour also announced in January a 2.8 billion euros ($3.5 billion) investment in digital commerce over the next five years.

($1 = 0.8019 euros) (Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon)