Alimentation Couche-Tard Inc., based in Laval, Quebec, has set its sights on a new acquisition target after unsuccessful attempts to purchase a French grocer and a major global convenience store chain. The company, known for its Couche-Tard and Circle K stores, revealed its interest in acquiring Polish convenience store operator Zabka Group.
Couche-Tard has proposed a deal valued at over $12 billion to acquire a controlling stake in Zabka, offering 32 Polish zloty per share, approximately $11.90 Canadian dollars. If successful, this acquisition would represent Couche-Tard’s largest takeover to date, aligning with its strategic goal of expanding its business significantly.
Zabka, named after the Polish word for frog, operates more than 13,000 convenience stores in Poland and Romania. In comparison, Alimentation Couche-Tard boasts a presence in 27 countries with 17,300 stores, including nearly 400 locations in Poland.
Both companies share similarities in their product offerings, focusing on a wide range of beverages, snacks, and an increased emphasis on prepared food items. Zabka leads in quick-serve meal transactions, with some stores featuring autonomous operations, while Couche-Tard excels in beverages and fuel sales, operating over 13,200 stores with gas stations.
Couche-Tard’s CEO, Alex Miller, emphasized the complementary strengths of both companies and their shared commitment to customer service during discussions about the potential acquisition. The deal is expected to generate approximately $250 million in cost savings within three years of completion.
The acquisition of Zabka has been a longstanding interest for Couche-Tard, with executives, including founder Alain Bouchard, considering the opportunity for over a decade. Previous attempts at acquiring other companies, such as French grocery chain Carrefour SA and Seven & i Holdings, have shaped Couche-Tard’s strategic growth trajectory.
The proposed transaction with Zabka has garnered support from key stakeholders, including Zabka’s incoming CEO Tomasz Blicharski and major investors holding a majority of shares, such as CVC Capital Partners and Partners Group. Regulatory approvals are pending, with the deal expected to close by December.
Depending on shareholder acceptance, Couche-Tard may acquire a significant portion of Zabka shares, potentially leading to the delisting of Zabka from the Warsaw Stock Exchange. The integration of Zabka into Couche-Tard’s operations is under consideration, with a focus on maximizing synergies and long-term growth opportunities.
Financial analysts, including Irene Nattel from RBC Capital Markets, view Couche-Tard’s acquisition strategy as both bold and strategic, positioning the company for sustainable growth and enhanced market presence.
Overall, the proposed acquisition of Zabka by Alimentation Couche-Tard represents a significant milestone in the company’s expansion efforts, signaling a strategic move towards strengthening its global footprint in the convenience store sector.