Alimentation Couche-Tard Inc., based in Laval, Quebec, has set its sights on a new acquisition target after previously unsuccessful attempts to purchase a French grocer and a major global convenience store chain.
The company has announced its intention to acquire the Polish convenience store operator Zabka Group in a deal valued at over $12 billion for a controlling stake. This offer values Zabka at 32 Polish zloty, approximately $11.90 Canadian dollars per share.
If successful, this acquisition would mark the largest in Couche-Tard’s history and align with its goal of significantly expanding its operations. Zabka, named after the Polish word for frog, operates more than 13,000 convenience stores in Poland and Romania.
Alimentation Couche-Tard, known for its Couche-Tard and Circle K stores and recognizable owl mascot, operates 17,300 stores across 27 countries, with around 400 locations in Poland. Both companies share similarities in offering a wide range of beverages, snacks, and hot food options.
While Zabka focuses on quick-serve meals and some fully autonomous locations, Couche-Tard’s strengths lie in beverages and fuel sales, with a significant number of its stores featuring gas stations.
CEO Alex Miller emphasized the complementary strengths of the two companies and their shared commitment to customer service during discussions about the proposed deal. The potential merger is expected to generate approximately $250 million in cost savings within three years of completion.
Couche-Tard’s interest in Zabka dates back at least 15 years, with founder Alain Bouchard suggesting a renewed focus on the company, leading to the current offer. The transaction has garnered support from Zabka’s management and major shareholders, including private equity firms CVC Capital Partners and Partners Group.
The deal is subject to regulatory approvals and is anticipated to be finalized by December. The extent of Couche-Tard’s acquisition of Zabka shares will depend on shareholder acceptance, with the possibility of delisting Zabka from the Warsaw Stock Exchange if Couche-Tard secures at least 95% of voting rights.
Analysts view the acquisition as a strategic move that aligns with Couche-Tard’s long-term growth objectives, noting the potential for significant benefits if the deal is successfully completed.