Couche-Tard Gets European Commission OK for Shell Denmark Deal

LAVAL, Quebec — The European Commission has given Alimentation Couche-Tard Inc. the green light to acquire A/S Dansk Shell's downstream retail business in Denmark. The approval is subject to divestment commitments.

The transaction is expected to close in May, and will be financed from Couche-Tard's available cash and existing credit facilities.

The European Commission approval comes one year after Couche-Tard announced an agreement with A/S Dansk Shell to acquire its retail, commercial fuels and aviation businesses in Denmark. Shell's Danish retail business is comprised of 315 sites, of which 225 are full-service stations, 75 are unmanned automated fuel stations, and 15 are truck stops. Of the 315 sites, 140 are owned by Shell, 115 are leased from third parties, and 60 are dealer-owned.

According to Couche-Tard, the company worked closely with the European Commission to obtain approval for this transaction, as compatible with Europe's internal market and with the European Economic Area Agreement. 

As part of the approval, Couche-Tard will retain 131 sites, of which 90 are owned and 41 are leased from third parties. Of these 131 sites, 74 are full-service stations, 49 are unmanned automated fuel stations, and eight are truck stops.

Subsequent to this transaction, Couche-Tard's network in Denmark would include a total of 286 company-operated stores; 153 company-owned and dealer-operated stores; 44 dealer-owned and dealer-operated stores; and 211 unmanned automated sites.

Divestment Plan

Couche-Tard has proposed to divest a select mix of both its current sites in Denmark and newly acquired Shell-branded stations, including the Shell/7-Eleven network and Shell's dealer-owned network. In addition, Couche-Tard intends to divest A/S Dansk Shell's commercial and aviation fuels businesses.

Through its wholly owned indirect Danish subsidiary Statoil Fuel & Retail A/S, Couche-Tard signed an agreement for the sale of the divested assets to DCC Holding A/S, a subsidiary of DCC plc. 

Pending customary regulatory approvals, this transaction is expected to close during the second half of fiscal 2017. Until approval and completion of this transaction, Couche-Tard and the divested businesses will continue to operate separately.

"Today is a great day for Couche-Tard in Denmark," said Jacob Schram, Couche-Tard's group president, Europe. "The acquisition from Dansk Shell puts us in a strong position in the Danish market — a core market for Couche-Tard in Europe."

Hans-Olav Høidahl, senior vice president, Scandinavia, for Statoil Fuel & Retail added: "Shell operates an attractive network in Denmark. Combining our operations will give us the opportunity to create a winning unmanned offering and develop an unrivaled full-service and convenience offering in Denmark. The divestment package allows us to concentrate on operations that are in line with our business model, extending our reach to additional, desirable areas of the market, while reducing site overlap."

Plesner, Euclid Law and Oxera acted as economic advisors to Couche-Tard for this transaction.

As of Jan. 31, Laval, Quebec-based Couche-Tard's network comprised 7,979 convenience stores throughout North America, including 6,560 stores offering road transportation fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a broad retail network across Scandinavia (Norway, Sweden and Denmark), Poland, the Baltics (Estonia, Latvia and Lithuania) and Russia. As of Jan. 31, its European network comprised 2,218 stores, the majority of which offer road transportation fuel and convenience products, while the others are unmanned automated fuel stations. Couche-Tard also offers other products, including stationary energy, marine fuel and chemicals. Couche-Tard operates key fuel terminals and fuel depots in six European countries

Since its acquisition of Topaz Energy Group Ltd. on Feb.1, Couche-Tard also operates a convenience and fuel retailing network comprised of 444 service stations in Ireland, as well as a significant commercial fuels operation with 30-plus depots and two terminals.

Additionally, roughly 1,500 stores are operated by independent operators under the Circle K banner in 13 other countries or regions worldwide.

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