Mergers & Acquisitions

France Doesn’t Care for Couche-Tard-Carrefour Combination

Finance minister nixes deal, so retailers look to partnership
Photograph: Shutterstock

LAVAL, Quebec, and MASSY, France — Alimentation Couche-Tard Inc.’s bid to acquire Massy, France-based supermarket and convenience-store retailer Carrefour SA is over after the French government nixed the offer, reported the Wall Street Journal, citing people familiar with the matter. But the deal may live on as a partnership, the companies said.

France’s Finance Minister Bruno Le Maire told Couche-Tard Chairman Alain Bouchard in a closed-door meeting in Paris that he was opposed to the takeover because the sale would put France’s food security and tens of thousands of jobs at risk amid the COVID-19 pandemic, the newspaper said.

Laval, Quebec-based Couche-Tard’s acquisition of Carrefour for nearly $20 billion would have created the world’s third-largest grocery retailer, behind Bentonville, Ark.-based Walmart Inc. and Neckarsulm, Germany-based Lidl owner Schwarz Group, said the report.

Couche-Tard and Carrefour issued a joint statement following the meeting.

“Preliminary discussions around a transaction, mindful of all stakeholders, had been initiated between Carrefour SA and Alimentation Couche–Tard Inc. following a friendly approach from the latter. In light of recent events, these are no longer continuing,” the statement said.

“Carrefour and Couche-Tard, however, have decided to extend their discussions to examine opportunities for operational partnerships,” it said. “Among the preliminary areas of cooperation to be explored are sharing best practices on fuel, pooling purchasing volumes, partnering on private labels, improving the customer journey through innovation, and evaluating ways of optimizing product distribution in the overlapping networks.”

“The opportunity for operational partnerships with Carrefour will further our journey towards becoming a leading global retailer. The discussed areas for cooperation align with our five-year strategic plan, as well as our commitment to strengthening our core convenience and fuel business and pursuing opportunities in multiple, related growth platforms,” said Brian Hannasch, president and CEO of Couche-Tard.

“Building innovative partnerships is a key part of Carrefour's transformation strategy,” said Alexandre Bompard, chairman and CEO of Carrefour. “The promising partnerships anticipated with North American leader Couche-Tard is fully aligned with this strategy, which has enabled us to return to a profitable growth path.”

With a multi-format network of approximately 12,300 stores in more than 30 countries, the Carrefour Group is one of the world's leading food retailers. Carrefour recorded gross sales of $97.5 billion in 2019.

Couche-Tard's network includes more than 9,200 c-stores in North America, with more than 7,100 in the United States under the Circle K and Holiday Stationstores banners and approximately 2,100 in Canada under the Circle K, Mac's and Couche-Tard banners. In Europe, under the Circle K and other banners, Couche-Tard operates a retail network in Scandinavia, Ireland, Poland, the Baltics and Russia including more than 2,700 stores and unmanned automated fuel stations. And under licensing agreements, more than 2,200 stores operate under the Circle K banner in 15 other countries and territories (Cambodia, Egypt, Guam, Guatemala, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings Couche-Tard’s worldwide total network of approximately 14,200 mostly Circle K-branded c-stores.

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