How Couche-Tard became Canadian retail giant now going after 7-Eleven

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The Japanese proprietor of comfort retailer giant 7-Eleven Inc. says it has acquired a possible takeover bid from Alimentation Couche-Tard Inc.

The Laval, Que.-headquartered operator of shops akin to Couche-Tard and Circle K made a pleasant, non-binding supply to accumulate a lot bigger rival Seven & i Holdings Co. Ltd. in a deal valued at round US$31 billion.

If the merger passed off, it might mark the most important overseas takeover of a Japanese firm and make Couche-Tard, valued at US$58.5 billion, one of many world’s greatest comfort retailer operators, with greater than 100,000 shops throughout the globe.

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“The company is focused on reaching a mutually agreeable transaction that benefits both companies’ customers, employees, franchisees and shareholders,” Couche-Tard stated in a press launch confirming the proposal. “There can be no certainty at this stage that any agreement or transaction will be reached.”

Seven & i stated {that a} particular committee of unbiased exterior administrators will “conduct a prompt, careful and comprehensive review of the proposal.”

Here’s what it’s good to learn about Couche-Tard and what a possible merger would imply.

How Couche-Tard obtained right here

Couche-Tard started in 1980 with a single comfort retailer in Laval earlier than rising to function greater than 16,000 shops world wide.

In 1987, the corporate acquired Métro-Richelieu Inc.’s 72 Sept-Jours shops, adopted by 60 Mac’s/La Maisonnée de Silcorp Ltd. shops in 1993 (in 2015, a lot of the Mac’s shops had been rebranded to Circle Ok).

Later, Couche-Tard took over Perette after which expanded exterior Quebec by shopping for C-Corp Inc., a subsidiary of grocery retailer Provigo Inc., which operated 245 Provi-Soir shops in Quebec and about 50 Winks shops in Ontario and Alberta.

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One thousand shops is nothing for me

Couche-Tard founder Alain Bouchard

In 1999, Couche-Tard introduced a pleasant takeover of Toronto-based Silcorp Ltd., making it Canada’s main comfort retailer operator. In the next years, it added the 30-store chain Tabatout, the Dunkin’ Donuts franchise in Quebec and 13 Pétro-T gas shops to the fold.

Couche-Tard didn’t cease there, changing into the principal proprietor of Scandinavian comfort and gas retailer Statoil Fuel & Retail ASA (later promoting all its shares in 2017). It additionally acquired Minnesota-based Holiday Stationstores, Inc., recognized for its contemporary sandwiches and breakfast choices, in 2017 in a transfer to enhance its personal meals choices.

It even briefly entered the hashish sport with its stake in Fire & Flower Holdings Corp., however skilled hundreds of thousands in losses in fiscal 2024 when the hashish firm went belly-up. Couche-Tard signed a deal to co-locate 10 Green Thumb Industries Inc. Rise Express hashish dispensaries subsequent to Circle Ok shops in Florida, nevertheless it’s nonetheless ready on authorities approval.

On Monday, Couche-Tard additionally stated it had reached a definitive settlement to accumulate GetGo Café + Markets from grocery store retailer Giant Eagle Inc. in a deal anticipated to shut someday in 2025.

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“One thousand stores is nothing for me,” Couche-Tard founder Alain Bouchard stated in an interview with Canadian Grocer again in 2014. “We want to have a foot in Asia with our own money.”

Making a bid for 7-Eleven

After Couche-Tard’s talks for a multi-billion-euro takeover of French grocery store chain Carrefour Group SA fell by because of meals safety considerations, the Canadian firm in January introduced it had accomplished its acquisition of sure European retail belongings from French oil giant TotalEnergies SE.

Couche-Tard has now set its sights on its subsequent overseas acquisition in Japan’s Seven & i.

News of the proposal despatched Seven & i shares skyrocketing by about 23 per cent in Tokyo, valuing the corporate at round 5.6 trillion yen (about $52.2 billion). Couche-Tard shares dropped two per cent in mid-day buying and selling on Monday.

“This potential takeover bid is a huge deal. 7-Eleven is the biggest operator in the U.S. convenience retail store space with a 14.5 per cent share of the market in 2023,” Neil Saunders, managing director of GlobalData, advised ABC News. “By comparison, Alimentation Couche-Tard’s banners had a 4.6 per cent market share. So, combining the two would produce an entity that controls almost a fifth of the market.”

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Questions in regards to the deal

However, analysts appear skeptical that an acquisition will happen. Nikkei Asia stated Couche-Tard beforehand approached Seven & i about buying the corporate in 2020.

“I strongly doubt that this takeover proposal will come to fruition, especially considering Seven & i’s resistance to divesting even their legacy businesses,” Oshadhi Kumarasiri, a LightStream Research Inc. analyst who covers Seven & i, advised Reuters.

“Unless the offer comes with a substantial premium over Seven & i’s recent highs, it seems improbable that the management would even consider this idea.”

• Email: slouis@postmedia.com

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