Couche-Tard enters Europe with $2.8 billion Norway buy

Wed Apr 18, 2012 9:48am EDT
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By Balazs Koranyi

OSLO (Reuters) - Canada's Alimentation Couche-Tard Inc (ATDb.TO: Quote) struck a deal to buy Norwegian company Statoil Fuel and Retail ASA SFRET.OL for 15.9 billion crowns ($2.8 billion) to gain a foothold in Europe's top-performing economies.

Couche-Tard, which operates convenience store chains in Canada and the United States, will pay 53 crowns a share, a 52.5 percent premium, for SFR, Scandinavia's top gas-station chain operator.

The deal, which comes less than two years after Couche-Tard failed in a $2 billion bid to buy U.S. convenience store chain Casey's General Stores (CASY.O: Quote), will allow the Canadian retailer to target new markets outside its traditional North American base.

Financed from existing and new credit facilities, the acquisition will add 2,300 fuel stations to Couche-Tard's 5,800 stores and gives it a quickly expanding position in the Baltics, Poland and western Russia. Couche-Tard said the deal would add to earnings "immediately and significantly".

"We think because it is in Scandinavia and a lot more stable (than the rest of Europe) ... it is great timing entering the market, and Europe will eventually solve its financial issues," Chief Executive Alain Bouchard told a news conference.

Scandinavia has been relatively calm amid Europe's economic struggles, with Norway leading the way as its massive oil sector insulates it from the rest of the continent.

Norway's economy is expected to grow 3.25 percent this year, according to the central bank, compared with a stagnating euro zone. The rest of the Nordics are also expected to outperform neighbors to the south.

Couche-Tard, which will maintain SFR as a separate entity, will use its new subsidiary as the basis for further growth in Europe as oil companies increasingly separate their upstream, refining and retail operations.   Continued...

Alimentation Couche-Tard Inc.'s President and Chief Executive Alain Bouchard poses for a picture after the company's annual shareholders meeting in Laval, August 31, 2010. REUTERS/Shaun Best