Setting sights on smaller targets

Pity poor Couche-Tard.

The Montreal-based convenience store operator, which controls several international and domestic chains, including Circle K, Becker’s and the company’s self-named Quebec chain, won’t be getting much bigger any time soon.

Couche-Tard, which has 16,000 stores around the world, including 900 or so under the Circle K banner in Ontario, last year announced it had reached a friendly agreement to take over French grocery giant Carrefour. The ambitious deal, worth roughly $20 billion (U.S.) would have almost doubled Couche-Tard’s store count — Carrefour has 12,000 stores spread around the globe. To put the size of the transaction into perspective, it’s worth more than half of CoucheTard’s $41.6 billion market cap. It would have made the combined company much more of a threat to rivals including 7-Eleven. It would have also given the convenience storefocused company a way to diversify revenue with a major move into the grocery sector.

In mid-January, however, the French government nixed the deal, saying it considered the food sector to be of “strategic national importance.” Days before Couche-Tard was told officially, Carrefour executives had told their suitors to spend more time kissing the governmental ring. Couche-Tard evidently didn’t pucker up quite enough. Ever since the deal was blocked, CoucheTard’s shares have been trending downward.

While they could still spend the money they were going to use for Carrefour on something else, targets that major don’t come along every day.