"These stores are located in the third largest city in the U.S. Strategically, this acquisition would be a complement to our expansion and growth plans for the Midwest Division. In addition to [image-nocss] being an excellent fit within our current operating framework, it would also provide a much larger presence and would allow us to more easily target our growth in the greater Chicago metropolitan area," said Darrell Davis, vice president of operations for the Circle K Midwest Division.
Of the 100 c-stores within the scope of the proposed venture, 89 stores are currently operated by third-party operators under an operator agreement with Shell, including 32 operated under the Circle K banner by Couche-Tard's Midwest Division. The remaining 11 locations currently operate as Shell retail marketers under a retail lease agreement. The majority of the 100 stores would be operated by Couche-Tard's Midwest Division under the Circle K banner.
As reported yesterday in a CSP Daily News Flash, all 100 stores held by Shell would be transferred over to the joint venture through a combination of purchased and contributed fee and lease sites.
Shell motor fuel and branded products would continue to be marketed at all 100 locations."This move supports Shell's previously stated vision of being the best fuels supplier in the U.S. by transitioning from the direct-supplied model," Shell Oil spokesperson Karyn Leonardi-Cattolica told The Montreal Gazette. "Additionally, this venture will join two high-quality brands on more corners in the greater Chicago metropolitan area, which is a big win for consumers."The transaction is subject to final management approvals of both companies, standard regulatory approvals and closing conditions and is expected to close by the end of 2009. An agreement between the parties does not allow the details of the joint venture to be disclosed at this time.
In late April, Couche-Tard acquired the On the Run c-store franchise system from Exxon Mobil Corp., as well as 43 company-owned and -operated stores in the Phoenix market area. Couche-Tard took control of the franchise agreements for approximately 450 On the Run stores currently operated by ExxonMobil-branded fuel dealers and distributors, acquired the land and buildings for 33 of the Arizona locations and assumed or entered leases for the remaining 10 sites.
Couche-Tard currently operates a network of 5,906 c-stores which include 4,122 motor fuel dispensing, located in 11 large geographic markets, including eight in the United States covering 43 states and three in Canada covering all 10 provinces. The company operates under the Couche-Tard, Mac's, Circle K and On the Run banners and employs more than 52,000 people. Its fiscal 2009 total revenues exceeded $15.7 billion with net earnings of $254 million representing a 34% increase than the previous year. Revenues were $3.7 billion in its fiscal first-quarter 2010, down 14.9% because of low fuel prices. But net earnings for the quarter increased to $91 million from $47.2 million the same period last year.
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