Canadian convenience-store operator Alimentation Couche-Tard (ACT) is in talks with Carrefour SA over a possible takeover.
In a statement ACT – which owns the Circle K brand – has offered US$20 billion to acquire the French supermarket group, but adds there is no certainty the discussions will result in a transaction.
The deal, if closed, would combine the two retail giants into a business valued at more than US$50 billion. The merger would help ACT expand its Circle K banner and other activities into Europe as well as enter the supermarket sector.
Facing growing competition from online rivals such as Amazon, European supermarket operators are viewed as ripe for tie-ups, though Couche-Tard’s approach raised analyst questions over the potential for cost cuts or purchasing savings.
“At first glance, I am not in favour of this operation. French food sovereignty is a key issue,” said French Finance Minister Bruno Le Maire in an interview on France 5 TV.
ACT, which has market capitalisation of $37 billion, entered Asia last November by acquiring Circle K Hong Kong from Convenience Retail Asia for $360 million. The acquisition added 40 company-owned stores and 33 franchised sites in Hong Kong and Macau to ACT’s 15,000-strong network across Canada, the US, Mexico, Europe, Japan, China and Indonesia.
Carrefour operates in six Asian countries, including Taiwan, China, South Korea and Japan. The French retailer acquired supermarket chain Wellcome from Hong Kong-based Dairy Farm last June in a deal that settled on December 31.
- Additional reporting by Dominique Vidalon, of Reuters.