✒ Carrefour is one of Europe’s largest grocery retailers. It also operates hypermarkets and supermarkets in Asia and Latin America. Couche-Tard is the largest independent convenience store operator in North America by number of stores, operating under brands such as the Corner Store, Circle K and Holiday.
Although the merging of convenience store chain and grocer has been seen in a similar deal last year when EG Group (UK petrol station business) acquired Asda (British supermarket chain) from Walmart for £6.8bn, a successful closing of this potential “merger” is in doubt.
First, geographic overlap between the retailers is virtually non-existent, synergy could hardly be the justification for offering a 30% premium.
Second, Couche-Tard’s stated vision is to become the world’s preferred destination for fuel and convenience. The acquisition attempt is a major departure from this stated strategy, if succeed, Carrefour will distract Couche-Tard from that mission.
Third, the finance minister of France has said that the deal would put the country’s “food sovereignty” at risk given that “Carrefour is the biggest private employer in France and a key link in the chain that ensures the food security of the French people.” Although described as a “friendly combination”, given a much larger market capitalisation Couche-Tard will likely be in the driver seat if the acquisition went through.