Carrefour, Couche-Tard End Acquisition Talks and Mull Partnerships

PARIS — Carrefour and Alimentation Couche-Tard have ended merger talks but are exploring operational partnerships, the two companies said in a joint statement Saturday.

“Building innovative partnerships is a key part of Carrefour’s transformation strategy,” said Carrefour chief executive officer Alexandre Bompard. The executive has been driving a broad overhaul of the French retailer by striking up cooperation agreements with companies like Google as well as food delivery companies.

“The promising partnerships anticipated with North American leader Couche-Tard is fully aligned with this strategy, which has enabled us to return to a profitable growth path,” he added.

Potential areas of cooperation with the Canadian group, which operates convenience stores and gas stations in North America and Europe, include sharing best practices on fuel, pooling purchasing, partnering on private labels, coming up with new ideas to improve customer service and optimizing product distribution in markets where they both operate.

Known for inventing big-box retail in the Sixties, Carrefour has in recent years responded to shifts in consumption by focusing on smaller, convenient formats. It also operates petrol stations.

“The discussed areas for cooperation align with our five-year strategic plan, as well as our commitment to strengthening our core convenience and fuel business and pursuing opportunities in multiple, related growth platforms,” said Brian Hannasch, Couche-Tard president and ceo.

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The Canadian group, which owns Circle K, and has franchise agreements around the world, including Mexico, Saudi Arabia, China and New Zealand, seeks to become a leading global retailer, Hannasch also said, noting partnerships with Carrefour could help push the group toward that goal.

Couche-Tard said Wednesday that it had offered 20 euros a share for a “friendly combination” with the French grocery retailer, a deal that would have valued it at over 16 billion euros.

But French government officials quickly weighed in, signaling their opposition to such a deal. French Finance Minister Bruno Le Maire said that food security was at stake, noting Carrefour’s role supplying food for the country’s population during the coronavirus crisis. Le Maire also noted that the retailer is the country’s largest employer.

Still, the potential tie-up has dominated headlines in France throughout the week, with speculation about whether Carrefour’s main shareholders might want to offload their stakes.

Luxury titan Bernard Arnault invested in the retailer in 2007, when shares were valued around 50 euros each. The Moulins family, which owns Galeries Lafayette, invested in 2014, when shares were valued over 25 euros a share. Arnault’s son Alexandre Arnault joined the board of directors in 2019, while Galeries’ Philippe Houzé, who is vice president of the board, joined it in 2015.

Carrefour shares closed Friday at 16.61 per share.

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