Couche-Tard Drops Bid for Carrefour Following Government Opposition

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Couche-Tard Drops Bid for Carrefour Following Government Opposition

01/19/2021

LAVAL, Quebec — Alimentation Couche-Tard Inc. and Carrefour SA have decided to discontinue talks about a possible merger, but the two retailers plan to look for opportunities to work together.

In a joint statement, the two companies 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.

"Building innovative partnerships is a key part of Carrefour's transformation strategy. 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," said Alexandre Bompard, chairman and CEO of Carrefour.

According to Brian Hannasch, president and CEO of Couche-Tard, partnering with Carrefour will further Couche-Tard's goal to becoming a leading global retailer. Laval-based Couche-Tard is the parent company of the global Circle K banner.

"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," Hannasch said.

As Convenience Store News previously reported, the two retailers were in "friendly talks" after Couche-Tard began exploring a possible takeover of French grocer Carrefour in a roughly $20-billion deal that would create a transatlantic retail giant.

However, news of a possible combination almost immediately met resistance from the French government, which said a transaction would threatened jobs and the country's food security amid the COVID-19 pandemic, according to The Wall Street Journal.

With a multi-format network of some 12,300 stores in more than 30 countries, the Carrefour Group is one of the world's leading food retailers. It has more than 320,000 employees.

In a conference call on Jan. 18, Hannasch said Couche-Tard would revive its bid for Carrefour if the company saw a change in the French government's stance on the proposed deal, Reuters added.

As of Oct. 11, Couche-Tard's network comprised 9,261 convenience stores throughout North America. Its North American network consists of 18 business units, including 14 in the United States covering 47 states and four in Canada covering all 10 provinces. In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of Oct. 11, Couche-Tard's network comprised 2,722 stores.

In addition, under licensing agreements, more than 2,220 stores were operated under the Circle K banner in 15 other countries and territories, which brings the worldwide total network to more than 14,200 stores.