Alimentation Couche-Tard to buy 2,000 service stations from French oil firm
Alimentation Couche-Tard Inc. has signed a €3.1 billion deal to acquire more than 2,000 service stations from French oil giant TotalEnergies SE.
The massive deal would add 2,200 retail sites to the Laval-based company's network, including all of TotalEnergies' retail assets in Germany and the Netherlands along with a 60% controlling interest in its Belgium and Luxembourg entities.
In an investor presentation Thursday (March 16), Alimentation Couche-Tard said that with the proposed acquisition, its Circle K brand – which is already present in 24 countries and territories – will move from serving a population of 70 million people to 185 million people.
"We see this as a strong geographical fit with our existing European network, which will allow us to grow together in some of Europe's strongest economies and move forward in our vision to become the world's preferred destination for convenience and mobility,'' said Brian Hannasch, CEO of Alimentation Couche-Tard in a news release.
The Laval-based convenience store and gas station operator said the acquisition would include all of TotalEnergies' retail assets in Germany and the Netherlands along with a 60– controlling interest in its Belgium and Luxembourg entities.
Of the service stations involved in the deal, more than half are in Germany, but Couche-Tard will also own 566 in Belgium, 387 in Netherlands and 45 in Luxembourg.
Couche-Tard said the sites are also strategically located in electric vehicle growth markets, and will allow the company unique opportunities to meet the needs of EV customers.
Many retail fuel companies are re-imagining their service station concepts, adding EV charging stations as well as better food and coffee offerings, Wi-Fi, and other services for customers who will need to wait in the store while their vehicles power up.
"In Europe, the transformation of mobility is changing the way customers use service stations,'' said Patrick Pouyanne, CEO of TotalEnergies, in a news release.
"Service stations must expand from just selling fuel to become full-fledged service hubs. For this reason, TotalEnergies has decided to partner with Couche-Tard and tap into its recognized expertise in operating convenience stores in service stations.''
The deal is subject to approvals from regulators and must go through an employee consultation process but is expected to close before the end of the year.
Couche-Tard tried to buy French grocer Carrefour SA in 2021, but decided to drop the bid, when the French government opposed the deal.
Couche-Tard reported net earnings of $737.4 million for the third quarter of fiscal 2023, compared to $746.4 million in the prior year. Adjusted net earnings were $741 million.
Revenues were $20 billion, up by $1.5 billion, an increase of 8%, from Q3 2022.
Total merchandise and service revenues hit $5 billion, an increase of 3.5%. Same-store merchandise revenues increased by 4.8% in the United States, 3.5% in Europe and other regions, and by 2.3% in Canada.
"As our markets across the globe, especially those in Europe, continue to face persistently high inflationary conditions, we have remained focused and committed to delivering a strong and consistent value to our customers and maintaining cost discipline in our operations. In convenience across the network, we had notable sales in our food program as well as with our private brand items, both offering high quality at lower price points. Throughout the quarter, we continued to be pleased with the resilience of our customers, and through our localized pricing efforts and on-going fuel promotions, we are providing them with further benefits. While our mobility results are still impacted by stay-at-home work patterns and higher prices, we continued to generate healthy fuel margins offsetting the decline in volumes," Hannasch said in a statement.
With files from Canadian Grocer staff