Canada’s Couche-Tard in takeover talks with Carrefour of France

Canadian convenience store group Alimentation Couche-Tard has approached France’s Carrefour about a takeover in a deal that would combine two retail groups jointly worth more than $50bn.

The talks were at an early stage, the companies said on Tuesday night in separate statements. Couche-Tard had made the approach fairly recently, said one person briefed about the matter, while a second said Carrefour needed time to study the idea.

If completed the deal would push Couche-Tard further into Europe and Latin America, and diversify its convenience store business by adding Carrefour’s portfolio of large-format supermarkets in suburban areas, as well as smaller urban stores. 

The Canadian group, which has a market value of $37bn, has long grown through acquisitions and was among the bidders last year for Speedway, the petrol station group owned by Marathon Petroleum that was eventually acquired by Japanese rival Seven & i Holdings for $21bn. 

In 2019, it sought to buy Caltex Australia in a $5.8bn deal that would have seen the company gain a foothold in a third continent but Couche-Tard walked away last April as the coronavirus pandemic took hold. 

Couche-Tard, based in suburban Montreal, has a network of more than 9,200 convenience stores across North America through several brands, including Circle K, employing about 109,000 people. The group has a smaller presence in Europe, where it has fewer than 3,000 stores in its network. In addition to convenience stores, it also owns petrol stations often located on site.

Carrefour is France’s largest supermarket chain with some 2,000 supermarkets and more than 700 large-format hypermarkets in Europe; it also has a presence in Brazil and Argentina. Alexandre Bompard, chief executive, has been on a cost-cutting drive in recent years, allowing him to make significant investments in developing ecommerce, which has boomed during the pandemic. It has a market value of €12.5bn and net debt of €15.8bn. 

The deal would see Couche-Tard follow a similar path to that taken by the owners of the highly acquisitive UK petrol stations business EG Group. They last year agreed a £6.8bn deal to buy the British supermarket chain Asda from Walmart in a deal that will not merge the two businesses but could see Asda opening convenience stores at EG Group petrol station sites. 

Couche-Tard’s approach to Carrefour was first reported by Bloomberg News. 

Additional reporting by James Fontanella-Khan and Arash Massoudi

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