Canada's Couche-Tard to buy Texas-based CST Brands in $4.4 billion deal

Mon Aug 22, 2016 9:21am EDT
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(Reuters) - Canadian convenience store operator Alimentation Couche-Tard Inc (ATDb.TO: Quote) said on Monday it would buy U.S. convenience store chain CST Brands Inc CST.N in a deal valued at about $4.4 billion, boosting its presence in southeast United States.

San Antonio, Texas-based CST is one of the largest publicly traded fuel retailers in North America and also controls the general partner of gas station company CrossAmerica Partners LP (CAPL.N: Quote).

The company, spun off from Valero Energy Corp (VLO.N: Quote) in 2013, also operates convenience stores and gas stations in Canada.

"With this transaction we would strategically strengthen our positioning in both the "sun belt" and the east coast of North America," Couche-Tard Chief Executive Brian Hannasch said in a statement on Monday.

Sun Belt refers to the region that stretches across the southern and southwestern portions of the United States.

Couche-Tard will offer CST Brands shareholders $48.53 per share in cash, a premium of 2.15 percent to the stock's Friday close.

However, the offer represents a premium of 41.9 percent to CST's closing price on March 3, the last trading day before the company said it would explore strategic alternatives.

CST, which has been under pressure from activist investors JCP Investment Management and Engine Capital LP, said in March it would explore strategic alternatives.

Excluding debt, the deal is valued at about $3.67 billion, based on Thomson Reuters data.   Continued...

Pedestrians walk past a Couche-Tard convenience store in Montreal, April 18, 2012.    REUTERS/Christinne Muschi