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A man refuels his car at a Statoil station in Warsaw.© Kacper Pempel / Reuters/Reuters

When Alimentation Couche-Tard Inc. announced its major purchase of Statoil ASA's convenience stores in April, the transformational deal was universally applauded.

There were no two ways about it: investors were simply giddy . Couche-Tard's shares jumped about 35 per cent in just a few weeks, and they've kept climbing since. Year-to-date, the stock is up a stunning 53 per cent.

But now the honeymoon is over, and a dose of reality is sinking it. Initially it all made sense – European margins are strong, the deal offered geographic diversification – but that was before European economic woes flared up again in the spring. In case you haven't noticed, they've persisted, albeit with less intensity now.

Couche-Tard reported earnings this week, and things in Europe are solid. The region now contributes about 36 per cent of Couche-Tard's total revenues, and margins for road transportation and fuel are almost double that of Canada – 10.67 cents per litre there against 5.85 cents per litre here.

But this week management conceded that the European economies are slowing, and that should affect both revenues and profits. There were no comments about Europe's same-store sales this quarter, but they're expected to be negative next year, and earnings before interest, taxes, depreciation and amortization could fall too.

That's something to watch. "The valuation of [Couche-Tard] is all about Statoil, which showed its first numbers this quarter," noted CIBC World Markets analyst Perry Caicco.

There are also some concerns about the synergies management expects to achieve from the takeover. "Statoil is certainly as big as advertised, and European in-store and fuel margins are high," Mr. Caicco noted. "However, the projected synergies of $150 to $200-million include some soft and unclear numbers, and are back-end loaded to the back half of [fiscal] 2013 and [fiscal] 2014."