After failing in previous acquisition attempts, Alimentation Couche-Tard Inc. has set its sights on a new target. The Quebec-based company, owner of Couche-Tard and Circle K stores, disclosed its pursuit of Zabka Group, a Polish convenience store operator.
Alimentation Couche-Tard proposed a buyout deal valued at over $12 billion for a controlling interest in Zabka, valuing each share at 32 Polish zloty or around $11.90 Cdn. If successful, this acquisition would mark Couche-Tard’s largest ever and align with its strategy to expand its market presence significantly.
Zabka, named after the Polish word for frog, operates more than 13,000 convenience stores in Poland and Romania, while Alimentation Couche-Tard has 17,300 stores across 27 countries, with around 400 in Poland.
Both companies have similarities in their offerings, with a wide range of beverages and snacks, as well as an emphasis on hot food in recent years. However, Zabka specializes in quick-serve meals, with some stores fully autonomous, while Couche-Tard focuses on beverages and fuel, operating over 13,200 locations with gas stations.
The proposed transaction, expected to yield approximately $250 million US in cost savings within three years, has been in the works for some time. Couche-Tard’s executives, including founder Alain Bouchard, had been eyeing Zabka for at least 15 years, with previous distractions from other acquisition targets.
Despite setbacks in past acquisition endeavors, including a failed bid for French grocery chain Carrefour SA and withdrawal from a deal with Seven & i Holdings, Couche-Tard remained determined to expand its portfolio. The company’s interest in Zabka was reignited by Bouchard, leading to the current offer.
Zabka’s incoming CEO, Tomasz Blicharski, expressed openness to the deal, citing Couche-Tard’s customer-centric approach and shared business values. The transaction has gained unanimous support from Zabka’s major shareholders, including private equity firms CVC Capital Partners and Partners Group.
Pending regulatory approvals, the deal is set to close by December, with the final number of Zabka shares acquired by Couche-Tard dependent on shareholder responses. Couche-Tard may opt to integrate Zabka fully or maintain its status as a public entity on the Warsaw Stock Exchange.
Analysts view the acquisition as a strategic move that aligns with Couche-Tard’s growth objectives, offering potential benefits while navigating regulatory considerations and financial implications.