Couche-Tard shares drop as Carrefour discussions continue

Cornelia Mascio
Gennaio 14, 2021

Alimentation Couche-Tard Inc., the Canada-based convenience store giant, is looking to take over European retailer Carrefour SA in a deal that would create a global retail powerhouse. "There can be no certainty at this stage that these exploratory discussions will result in any agreement or transaction".

French grocer Carrefour said it had been approached by the Circle K owner in a friendly manner and that discussions were "very preliminary".

Shares of Carrefour have risen 10 percent in Paris trading this year, giving the company a market capitalization of 12.6 billion euros (US$15.4 billion) at Tuesday's close. The offer would value Carrefour at 16.2 billion euros ($19.72 billion). Last year, it was among potential suitors competing to acquire USA gas station operator Speedway, which was eventually sold to Seven & i Holdings Co. for US$21 billion.

Carrefour, which was founded over 60 years ago, operates almost 13,000 hypermarkets, supermarkets and convenience stores in France, Spain, Italy, Belgium, Poland, Romania, Brazil, Argentina and Taiwan.

Couche-Tard has a network of more than 9,000 convenience stores in North America, most of which also offer fuel, according to its Web site. It also had about 2,700 locations in Europe as of October past year.

Carrefour, the biggest private employer in France, is one of Europe's largest grocery retailers. Convenience-store operators have been expanding into the supermarket industry, including in the United Kingdom, where TDR Capital teamed up with the gas-station entrepreneurs behind EG Group in October to acquire a majority stake in grocer Asda from Walmart Inc. It had about 5.2 billion euros in net financial debt as of June last year, down from nearly 6 billion euros a year earlier, partly due to proceeds from the China deal.

The yield on Carrefour's bonds due 2027 rose six basis points to 0.30 per cent as of 7:52 London.

Couche-Tard entered the Asian market in November through a deal to buy Convenience Retail Asia Ltd's Hong Kong unit for HK$2.79 billion ($359.80 million).

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