Couche-Tard drops US$20B Carrefour takeover plan.

Canada's Alimentation Couche-Tard Inc. and France's Carrefour SA broke off talks on a US$20-billion deal in the face of strong opposition from France's finance minister to the tie-up, according to people familiar with the matter.

The decision to halt negotiations came after top executives of the Canadian convenience-store operator flew to Paris this week to offer the government several sweeteners: billions of euros of investment in Carrefour supermarkets, no job cuts for at least two years and dual stock listings in France and Canada.

It was not enough to persuade French Finance Minister Bruno Le Maire, who told executives in a private meeting Friday that he was standing by his position that a takeover would be bad for France. Earlier, Le Maire said on BFM TV: “To sum up: it's a no. A courteous no, but a no that is clear and definitive.”

Couche-Tard and Carrefour declined to comment.

The French move, with ministers shooting down the offer less than 24 hours after talks were confirmed, sparked disquiet in some business circles over how French President Emmanuel Macron decides which foreign investment is welcome and which is not.

Some politicians and bankers said the pushback could tarnish Macron's pro-business image, while others highlighted that the COVID-19 crisis had forced more than one country to redefine its strategic national interests.

The comments sparked a trans-Atlantic flurry of lobbying and Couche-Tard chair Alain Bouchard flew to Paris to explain the merits of the deal to Le Maire, the source said, adding the finance minister reiterated his opposition without listening to the terms of the transaction.

The decision came despite input from Pierre Fitzgibbon, the economy minister in Couche-Tard's home province of Quebec, who said he would speak with Le Maire Friday to apply “positive pressure” in favour of the transaction. Fitzgibbon said he would stress the closeknit relationship between the province and France that has facilitated previous deals, including Alstom SA's purchase of Bombardier Inc.'s rail unit, announced last year.

Couche-Tard “could be a very strategic shareholder that would benefit Carrefour's operations in France,” Fitzgibbon said to reporters.

The Canadian convenience-store operator had planned to pump 3 billion euros (US$3.6 billion) into the French supermarket operator over five years, according to a person familiar with the situation, as part of a set of assurances to the government of President Emmanuel Macron.

Other pledges include preserving jobs for two years, keeping Carrefour's headquarters in France and maintaining stock listings in France as well as Canada, said the person, who asked not to be identified because the information isn't public.

Carrefour shares gave up some of this week's gains after Le Maire said he was prepared to give a “clear and definitive no” to a deal, falling 2.9 per cent to 16.61 euros in Paris. Couche-Tard's offer is for 20 euros per share; both sides saw room for negotiation on the final price, according to people familiar with the situation.

Le Maire previously cited concerns about a French supermarket chain falling into foreign hands, saying the country needs to maintain domestic control over its food supply. France recently beefed up its authority to block foreign takeovers.

“We have the legal instrument available to us,” Le Maire said Friday. “I'd rather not have to use it, but will if needed.”

Carrefour employs around 100,000 people in France and is the country's largest private employer, with stores ranging from convenience outlets to giant hypermarkets.