COUCHE-TARD IN TALKS TO BUY FRENCH GROCER CARREFOUR.
Alimentation Couche-tard Inc., the convenience- store giant that owns the Circle K chain, said it’s exploring a transaction with French grocer Carrefour SA, a deal that would represent a major strategy shift for the Canadian firm.
Couche-tard said Tuesday it has started “exploratory discussions” on a friendly deal with Carrefour, confirming an earlier Bloomberg News report.
There’s no certainty the talks will lead to a transaction, the Quebec- based company said.
Shares of Carrefour have risen 10 per cent in Paris trading this year, giving the company a market capitalization of 12.6 billion euros ( US$ 15.4 billion) at Tuesday’s close.
Couche- Tard shares slipped 2.2 per cent after the initial Bloomberg report, closing at $ 41.31 in Toronto to value the company at almost $46 billion. Representatives for Carrefour couldn’t immediately be reached for comment.
Couche-tard’s focus has been convenience stores and gas stations, not supermarkets. It has built an empire by methodically acquiring smaller rivals, first at home in Canada before entering the U.S. in 2001 and Europe in 2012.
Lately its focus had been on the U. S. and Asia Pacific regions, where it tried to buy Caltex Australia Ltd. before deciding against a revised offer during the pandemic.
A deal with Carrefour would expand its presence in Europe, where its potential target operates more than 2,800 supermarkets and 703 larger-format hypermarkets, and in Latin America, where it has stores in Argentina and Brazil.
Couche-tard, which started from a single store in a Montreal suburb in 1980, has a no- frills reputation, with top management known for visiting scores of stores to spot the weaknesses before making acquisitions.
Couche-tard has a network of more than 9,000 convenience stores in North America, most of which also offer fuel retail, according to its website.
It also had about 2,700 locations in Europe as of October last year.
A pioneer of the hypermarket format, Carrefour lost ground in recent years to Leclerc SA and German discounters in France, while forays into overseas markets such as Latin America and China have produced mixed results.
Carrefour two years ago sold an 80 per cent stake in its China unit to local retailer Suning.com Co.
It had about 5.2 billion euros in net debt as of June last year, down from almost six billion euros a year earlier, partly due to proceeds from the China deal.
Under CEO Alexandre Bompard, Carrefour has cut costs by scaling back the company’s giant stores, which sell everything from produce to clothing and housewares, while expanding in e- commerce and organic food.