Couche-Tard, Carrefour close merger talks, consider alliance

Bloomberg

Canada’s Alimentation Couche-Tard Inc and France’s Carrefour SA abandoned talks on a proposed $20 billion merger following stiff opposition from the French finance minister, and will look instead at forming a looser alliance.
The companies will now consider how to work together on fuel purchases, branding and distribution where their networks overlap, the companies said in a joint statement.
“The opportunity for operational partnerships with Carrefour will further our journey towards becoming a leading global retailer,” said Brian Hannasch, president and chief executive officer of Couche-Tard.
A merger would have created a retail powerhouse, combining Couche-Tard’s North America-focused network of 14,200 convenience stores with Carrefour’s sizable European operations, which include hypermarkets and smaller outlets. It could also have ranked as one of the biggest-ever takeovers of a French company by a foreign entity.
The decision to stop the merger negotiations comes after top executives of the Quebec-based company flew to Paris to offer the government several sweeteners, including billions of euros of investment in Carrefour stores, no job cuts for at least two years and dual stock listings in France and Canada.
They failed to persuade Finance Minister Bruno Le Maire, who told executives in a private meeting he was standing by his position that a takeover would be bad for France. Earlier that day, Le Maire said on BFM TV: “To sum up: it’s a no. A courteous no, but a no that is clear and definitive.”
Government officials in Canada tried to press the case. Quebec Economy Minister Pierre Fitzgibbon emphasized the close links between the French-speaking province and France, including deals that have gone the other way.
Couche-Tard “could be a very strategic shareholder that would benefit Carrefour’s operations in France,” Fitzgibbon said to reporters.
Couche-Tard — the name means “night owl” in French — is Canada’s largest retailer by market value and has built a global empire through acquisitions over four decades. But it faced hurdles from the outset in France for its offer of 20 euros per share.
Carrefour employs about 100,000 people in France and is the country’s largest private employer, making a takeover politically sensitive.