Alimentation Couche-Tard Inc., based in Laval, Quebec, failed in previous attempts to acquire a French grocer and a major global convenience store chain. However, the company has now set its sights on a new target – Polish convenience store operator Zabka Group.
Couche-Tard has proposed a takeover valued at over $12 billion for a controlling interest in Zabka, with each share priced at 32 Polish zloty, approximately $11.90 in Canadian dollars. This potential deal would represent Couche-Tard’s largest acquisition to date and align with its goal of expanding its reach significantly.
Zabka, named after the Polish word for frog, operates over 13,000 convenience stores in Poland and Romania. In comparison, Alimentation Couche-Tard operates 17,300 stores across 27 countries, including nearly 400 in Poland. The two companies share similarities in their product offerings, focusing on a wide range of beverages, snacks, and expanding into hot food options.
Zabka differentiates itself by featuring quick-serve meals in one out of every five transactions and some fully autonomous locations. In contrast, Couche-Tard emphasizes beverages and fuel, with approximately 13,200 locations incorporating gas stations – a service not provided by Zabka.
CEO Alex Miller emphasized that the proposed merger is about leveraging each company’s strengths to enhance customer service. The deal is expected to generate around $250 million in cost savings within three years of completion. Couche-Tard’s interest in Zabka dates back at least 15 years, with the recent offer materializing following a suggestion from founder Alain Bouchard.
Both companies’ executives and major shareholders, including private equity firms CVC Capital Partners and Partners Group, are in unanimous support of the transaction, subject to regulatory approvals. The deal is slated to close by December, contingent on shareholder acceptance of the offer. Depending on the level of acceptance, Couche-Tard may fully integrate Zabka or maintain its status as a publicly traded entity on the Warsaw Stock Exchange.
RBC Capital Markets analyst Irene Nattel commended the strategic approach of Couche-Tard’s CEO, viewing the potential acquisition as a bold yet calculated move that aligns with the company’s growth objectives. Nattel highlighted the sensible fit between the two entities, anticipating positive long-term outcomes pending regulatory processes and financial impacts.
