Alimentation Couche-Tard Inc., the company behind Couche-Tard and Circle K stores based in Laval, Quebec, has set its sights on acquiring Zabka Group, a Polish convenience store operator, after unsuccessful attempts to purchase a French grocer and a major global convenience store chain.
The proposed takeover involves an offer exceeding $12 billion for a controlling interest in Zabka, valuing the company at 32 Polish zloty, approximately $11.90 Cdn, per share. If successful, this deal would represent Couche-Tard’s largest acquisition to date, aligning with its strategic goal of significantly expanding its market presence.
Zabka, named after the Polish word for frog, boasts a network of over 13,000 convenience stores spanning Poland and Romania. In comparison, Alimentation Couche-Tard operates 17,300 stores in 27 countries, with around 400 outlets in Poland.
Both companies specialize in offering a wide range of beverages, snacks, and hot food items. Notably, Zabka excels in quick-serve meals, with approximately one in five transactions involving such items, and some of its stores operating autonomously. In contrast, Couche-Tard focuses on beverages and fuel, with about 13,200 locations featuring gas stations, a service Zabka does not provide.
During discussions regarding the proposed transaction, Couche-Tard CEO Alex Miller emphasized the collaborative nature of the deal, highlighting the shared commitment to enhancing customer service through the combination of their respective strengths. Miller anticipates achieving approximately $250 million US in cost savings within three years of finalizing the acquisition.
The interest in Zabka has been longstanding, with Couche-Tard executives, including founder Alain Bouchard, considering the company for at least 15 years. Following previous failed acquisition attempts, the decision to pursue Zabka was influenced by Bouchard’s recommendation upon returning from a break.
Tomasz Blicharski, Zabka’s incoming CEO, expressed a positive reception to Couche-Tard’s approach, citing the alignment in customer-centric values between the two companies. The acquisition has garnered unanimous support from Zabka’s executive management and key investors, including private equity firms CVC Capital Partners and Partners Group.
The transaction, contingent on regulatory approvals, is projected to be finalized by December. The ultimate extent of Couche-Tard’s ownership in Zabka will hinge on the acceptance of the offer by shareholders. If the acquisition surpasses a 95% voting rights threshold, Couche-Tard may opt to delist Zabka from the Warsaw Stock Exchange.
As the deal progresses, Miller emphasized the importance of strategizing to maximize the benefits of the integration. Analysts view the proposed acquisition as a strategic move that aligns with Couche-Tard’s growth objectives, signaling potential long-term advantages for the company.