Couche-Tard & EG Group in Talks Over Potential Merger

Any possible deal could value EG Group at $16 billion.
Logos for EG Group and Couche-Tard

LAVAL, Quebec — The year's first major merger-and-acquisition (M&A) deal could be coming down the pike.

According to a report late last week by The Wall Street Journal, Alimentation Couche-Tard Inc. and EG Group are exploring a possible tie-up. The two international retailers have traded proposals in recent weeks that would put EG's value around $16 billion, the news outlet added.

The news comes more than six months after EG Group began exploring options that include a sale. Citing people familiar with the matter, Bloomberg said in September that the U.K.-based company was working with advisors and any deal could be valued at approximately $15 billion.

TDR Capital-backed EG Group was founded by brothers Moshin and Zuber Issa, who currently run the company as co-CEOs. Its U.S. subsidiary is Westborough, Mass.-based EG America.

EG Group began putting the pieces of EG America together when it acquired Cincinnati-based The Kroger Co.'s convenience store network in 2018. The $2.15-billion transaction marked the company's entry into the United States market, giving it a base of 762 c-stores operating in 18 states under Turkey Hill, Loaf 'N Jug, Kwik Shop, Tom Thumb and Quik Stop banners, as Convenience Store News previously reported.

It followed up that deal with the acquisition of Westborough, Mass.-based Cumberland Farms in 2019. That move added 567 c-stores in seven Northeast states and Florida to EG Group's U.S. footprint.

In addition to those two major deals, EG Group picked up several small- and mid-sized chains in the past three years, including TravelCenters of America Inc.'s Minit Mart portfolio, Columbus, Ohio-based Certified Oil and Syracuse, N.Y.-based Fastrac Markets.

In all, EG Group operates more than 6,300 sites in 10 countries. It employees roughly 54,000 associates and tallied $26.5 billion in revenue in 2021, according to the company.

Laval-based Couche-Tard, the parent company of the global Circle K brand, is also no stranger to M&A activity. Over the past decade the retailer has made a big splash in the United States.

In 2015, Couche-Tard acquired The Pantry, the Cary, N.C.-based parent company of Kangaroo Express. At the time the roughly $1.7-billion deal closed that March, The Pantry operated 1,509 stores in 13 states under select banners, including Kangaroo Express, its primary operating banner.

Two years later, the company took ownership of San Antonio-based CST Brands Inc. in a $4.4-billion transaction.

At the time the deal closed, Georgia, Florida, New York and Eastern Canada. Its U.S. banners were Corner Stores, Nice N Easy Grocery Shoppes, and Flash Foods. In Canada, CST is the exclusive provider of Ultramar fuel and its Dépanneur du Coin and Corner Stores.

Couche-Tard has also been active in Europe. In 2012 it acquired Norway's Statoil Fuel & Retail ASA, and four years later, the company acquired Topaz Energy Group Ltd. of Ireland.

Today, Couche-Tard Couche-Tard operates in 26 countries and territories, with close to 14,200 stores.