Carrefour shares leap on Couche-Tard merger

PARIS — European retail giant Carrefour has received a surprise merger approach from Canadian conveniencestore operator Alimentation Couche-Tard, sending the French company’s shares up 13 per cent on Wednesday.

European supermarket groups have been expected to seek tie-ups to counter growing competition from online rivals such as Amazon, though Couche-Tard’s announcement that it has initiated exploratory talks with Carrefour raised analyst questions over the potential for cost or purchasing savings.

Couche-Tard, which is mainly focused on gas stations in North America, would be entering virgin territory with Carrefour. Continental Europe’s biggest retailer has operations across Europe and Brazil, including its out-oftown hypermarkets.

“Given the nature and location of ATD’s businesses, we see little scope for synergies,” Citi analysts said, adding that fierce competition makes France a particularly tough market.

It was not immediately clear whether Couche-Tard might seek to cherry-pick from Carrefour’s operation.

Couche-Tard has mainly made smaller acquisitions in the past, though it was reported to be a potential suitor for Marathon Petroleum Corp’s Speedway gas stations last year before another buyer sealed a US$21-billion deal.

There is no certainty at this stage that these discussions will result in any agreement or transaction, Couche-Tard said.

Carrefour, which described the approach as “friendly,” said talks were preliminary, but the news sent its shares up 13.6 per cent Wednesday morning.

Bloomberg reported that Couche-Tard was discussing a bid which would value Carrefour at US$19.72 billion.

The company employs more than 320,000 people worldwide, including 105,000 in France, its largest market. It is also France’s largest private sector employer. The French Presidency declined to comment on the Canadian group’s approach.

Carrefour launched a fiveyear overhaul plan in 2018 to cut costs and boost e-commerce investment to contend with online competitors as well as domestic rivals such as Leclerc.