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A man cycles past a Couche-Tard convenience store in Montreal, Jan. 13, 2021.CHRISTINNE MUSCHI/Reuters

When I was in Ho Chi Minh City, the former Saigon, three years ago, I wanted to track down Hoang Van Cuong, the war photographer who took the photos of the North Vietnamese tank crashing through the gates of the presidential palace on April 30, 1975, signalling the fall of South Vietnam.

None of my contacts knew his exact address but said he lived on top of the Circle K convenience story on Dong Du street. The store, with its bright red-and-white banner, was easy to find. The entrance to his apartment was actually inside the 24-hour shop, so I passed through a tiny bit of Canada before banging on his door.

Circle K is a Couche-Tard brand and was the first international convenience store chain to open in Vietnam, in 2008, where it now has 400 outlets. Circle Ks can be found in 15 countries and territories outside Canada, stretching from Mongolia and Indonesia to Egypt and Honduras, a testament to the retailer’s great success in a business where Canada does not typically shine.

Couche-Tard usually faces little opposition when it expands overseas, but it finally met its match on the weekend, when it and Carrefour, the French retailer that introduced the big-box “hypermarket” format to Europe in the early 1960s, abandoned their merger talks. Couche-Tard had offered US$20-billion for Carrefour, one of the biggest food retailers in Europe and France’s top private-sector employer, with 105,000 workers.

The deal would have been transformational, handing Couche-Tard the Walmart of France and making it one of the world’s top retailers. To Couche-Tard’s surprise, the French government shut the takeover down before shareholders could examine it.

Couche-Tard learned the hard way that food distribution is considered a vital industry in France, along with defence, energy, water, agriculture and telecommunications – foreigners need not apply. “Food security is strategic for our country, so that’s why we don’t sell a big French retailer,” Finance Minister Bruno Le Maire told BFM TV last week.

At least he was decisive. He could have submitted the takeover proposal to a lengthy official review before drowning it in the Seine. But the French cabinet didn’t want to reveal the probable real reason it wanted Carrefour kept in French hands: It likes big head offices – and there is nothing wrong with that.

To argue that Carrefour is vital to national security is a stretch. While it is the biggest (measured by number of stores) retailer in France, it is one of many in the food game.

And it’s unlikely Couche-Tard would have cut Carrefour jobs or shrunk the head office. It would have made no sense. The two retail formats have almost no similarities and no geographic overlap, virtually eliminating the potential for synergies. In fact, the Canadians were ready to invest about €3-billion ($4.6-billion) in Carrefour over five years and promise to preserve existing jobs for two years.

The French government doesn’t take kindly to foreigners picking up their prize corporate assets, although it certainly has let a few of them go, including cement maker Lafarge and steelmaker Arcelor. In 2005, the government went into full jingoism mode when PepsiCo was said to be on the verge of bidding for Danone. The prime minister called Danone a national “crown jewel” and vowed to “defend the interests of France,” as if the recipe for making yogurt was the equivalent of proprietary missile technology.

A year earlier, the government warned off Swiss pharmaceutical giant Novartis, which was mulling a bid for Aventis. In the end, the government strong-armed the merger of Aventis and Sanofi-Synthélabo to create drugs giant Sanofi-Aventis (now Sanofi), which has made France a player in the COVID-19 vaccine race.

Of course, the government is always happy to back foreign takeovers by French companies, as it did last year when Alstom agreed to buy Bombardier Transportation, the train division of Montreal’s Bombardier. The Canadian company’s purchase of Alstom would have been unthinkable. French-style interventionism may be abhorrent to free-market capitalists, but it has preserved a lot of French head offices, and many European countries have more or less adopted France’s model.

And Canada? The federal government has stopped a very small number of takeovers, notably BHP’s attempt in 2010 to buy Saskatchewan’s Potash Corp. For the most part, it looked the other way when Canadian corporate champions were picked off by foreign buyers, only to be hollowed out.

The reason why Canada does not have the equivalent of BHP, one of the world’s top mining companies, is that it watched impotently as Inco and Falconbridge went to foreign buyers in 2006; the two companies had wanted to merge. Alcan, Dofasco, Stelco and dozens of other industrial powerhouses were wiped off the Canadian map. The result is that Canada has a distinct lack of big-name corporate players, the kinds of companies that pay a lot of taxes, provide ample opportunity for career advancement and fund research and development.

Courche-Tard is one of Canada’s few global players. Would the Canadian and Quebec governments let it go if it received a foreign takeover offer? Maybe, but maybe not. Only a few months ago, Quebec and the Caisse de dépôt et placement du Québec came to Cogeco’s defence when a U.S. cable company hit it with a hostile takeover offer. In 2012, the Quebec government went ballistic when Lowe’s of the United States tried to buy home-improvement chain Rona. (Lowe’s got its way four years later after making substantial commitments to keep Rona intact.)

The French government’s refusal to support Couche-Tard’s bid for Carrefour was wrong on many levels and sent out the message that France is not always open for business. But that was no secret. France has a fleet of high-profile head offices and the high-quality jobs that go with them. Canada doesn’t – and must look at the French model with envy even as it decries it.

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