Circle Kanada
By George Anderson
Canada’s largest convenience store operator, Alimentation Couche-Tard, has agreed to purchase 1,600 Circle K stores in 16 states from ConocoPhillips for $830 million, reports
Reuters.
The deal gives Couche-Tard 4,630 stores with $6.57 billion in annual sales, making it the seventh largest convenience store chain in the country.
Jacques Rousseau, an analyst with Friedman Billings Ramsey said the deal was good for ConocoPhillips, “With so many people trying to get out of the retail business, there aren’t
many buyers.”
A number of companies are looking to exit the convenience store business as sales and profits have taken a hit from decreased consumption of tobacco products and price pressure
at the pump from big box competitors.
Moderator’s Comment: What will Couche-Tard need to do to with Circle K to be successful?
Couche-Tard is being helped in this deal by ConocoPhillips agreeing to a five-year deal to supply fuel. According to the Reuters report, this aspect
of the deal will deliver about $50 million in annual savings to Couche-Tard. [George
Anderson – Moderator]