Couche-Tard Eyes Stake in World's Largest Fuel Retail Network
LAVAL, Quebec -- Alimentation Couche-Tard Inc. could be poised to grow its international portfolio.
According to Reuters, the Canada-based retailer is on the short list to buy a $16-billion minority stake in China's Sinopec Sales, the world's largest fuel retail network. Couche-Tard is reportedly one of six companies on that list.
State-run Sinopec, which was formally known as China Petroleum & Chemical Corp., is selling up to 30 percent of Sinopec Sales by year end as Beijing restructures government-owned assets. Sinopec Sales has more than 30,000 service stations and more than 23,000 convenience stores. The company reported a net profit of $4.1 billion in 2013.
While a deal would give investors little control over the company, a likely exit through an initial public offering planned within three years has attracted a wide range of suitors, people familiar with the deal told the news agency.
Sinopec also wants to boost non-fuel sales and is looking for investors to get into businesses such as car services, telematics, online-to-offline sales, financial services and advertising, the sources added. Non-fuel sales accounted for less than 1 percent of Sinopec Sales' revenue in 2013. By contrast, non-fuel retail sales account for about half the profit for gas stations in the United States.
Couche-Tard's Vice President and Chief Financial Officer Raymond Paré declined to comment, according to Reuters. Final bids are due by the end of the month, although it is not clear how many shortlisted bidders are likely to make offers. Couche-Tard is bidding solo.
Any deal would expand Couche-Tard's already extensive worldwide footprint. As of April 27, Couche-Tard’s network was comprised of 6,241 convenience stores throughout North America, including 4,756 stores with road transportation fuel dispensing. Its North American network consists of 13 business units, including nine in the U.S. covering 39 states and the District of Columbia, and four in Canada covering all 10 provinces.
In Europe, Couche-Tard operates a broad retail network across Scandinavia (Norway, Sweden, Denmark), Poland, the Baltics (Estonia, Latvia, Lithuania) and Russia, which totaled 2,258 stores as of April 27. The majority offer road transportation fuel and convenience products, while the others are unmanned, automated service stations that offer road transportation fuel only.
The corporation also offers other products, including stationary energy, marine fuel, aviation fuel, lubricants and chemicals. Couche-Tard operates key fuel terminals and fuel depots in eight countries.
In addition, under licensing agreements, about 4,600 stores are operated under the Circle K banner in 12 other countries worldwide -- China, Guam, Honduras, Hong Kong, Indonesia, Japan, Macau, Malaysia, Mexico, Philippines, Vietnam and United Arab Emirates -- which brings the number of sites in Couche-Tard's network to more than 13,100.