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Alimentation Couche-Tard reportedly in talks to combine with U.K. retailing giant

Canadian Press - Mon May 2, 11:07AM CDT
Signage of a Couche-Tard convenience store is shown in Montreal in an October 5, 2012, file photo. THE CANADIAN PRESS/Graham Hughes

Alimentation Couche-Tard Inc. is reportedly exchanging proposals in a multibillion-dollar combination with a British retailing giant that would feed its growth ambitions.

The Wall Street Journal recently reported that talks between the owner of Circle K and privately held EB Group would value the latter at about US$16 billion or more including debt.

The combined company to be headquartered at Couche-Tard's base in Laval, Que., would have over US$70 billion in annual revenue and 21,000 fast-food joints, gas stations and grocery stores in more than 30 countries.

The newspaper said people familiar with the matter warn that talks may not result in a deal.

Irene Nattel of RBC Dominion Securities says the combination of two of the world's largest convenience-store chains would be a "compelling potential transaction" and one that is consistent with Couche-Tard's five-year plan to double its size.

The analyst wrote in a note to clients that Couche-Tard has "sufficient balance sheet capacity" to do a deal of this magnitude but may look at different financing options, including a tranche of equity that could be a catalyst for a U.S. stock market listing.

This report by The Canadian Press was first published May 2, 2022.

Companies in this story: (TSX:ATD)

Provided Content: Content provided by Canadian Press. The Globe and Mail was not involved, and material was not reviewed prior to publication.