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 Zabka Group, a Polish convenience store operator.
Couche-Tard has proposed a takeover valued at over $12 billion for a controlling interest in Zabka, with a tender offer pricing each Zabka share at 32 Polish zloty, equivalent to approximately $11.90 Canadian dollars. If successful, this deal would represent Couche-Tard’s largest acquisition to date, fulfilling its strategic goal of significantly expanding its business reach.
Zabka, named after the Polish word for frog, operates more than 13,000 convenience stores in Poland and Romania. In contrast, Couche-Tard boasts 17,300 locations across 27 countries, with nearly 400 stores in Poland.
Both companies share similarities in their product offerings, focusing on a wide range of beverages, snacks, and expanding into hot food options. Zabka sees one in every five transactions involving a quick-serve meal, with some stores fully autonomous, while Couche-Tard shines in beverages and fuel sales, with approximately 13,200 locations featuring gas stations.
Couche-Tard’s CEO, Alex Miller, emphasized that the proposed transaction aims to leverage the strengths of both companies and enhance customer service. The deal is projected to yield around $250 million USD in cost savings within three years of completion.
The long-anticipated move towards acquiring Zabka reflects Couche-Tard’s persistent pursuit of expansion opportunities. Previous endeavors included a failed $20 billion US bid for Carrefour SA and unsuccessful attempts to acquire Seven & i Holdings, the parent company of 7-Eleven.
The acquisition proposal for Zabka has garnered support from key stakeholders, including incoming Zabka CEO Tomasz Blicharski and major investors holding a majority stake in the company. The deal is subject to regulatory approval and is anticipated to be finalized by December.
Depending on shareholder acceptance, Couche-Tard may acquire a majority stake in Zabka, potentially leading to the delisting of the company from the Warsaw Stock Exchange. Miller hinted at the possibility of full integration or maintaining Zabka as a publicly traded entity in Poland.
RBC Capital Markets analyst Irene Nattel praised Miller’s strategic approach, considering it a bold yet calculated move that aligns with Couche-Tard’s growth objectives. The plan, if successful, is expected to drive significant long-term benefits for the company and its expansion trajectory.