Convenience-Store Giants Couche-Tard, EG Group in Deal Talks

Two of the world’s biggest convenience-store chains are discussing a deal that would combine

gas stations, roadside

Circle K minimarts and Cumberland Farms grocery stores among a handful of other retail brands.

Alimentation

which runs 7,000 convenience stores in the U.S. and as many abroad, and British retailer EG Group have traded proposals in recent weeks that would value EG at roughly $16 billion or more including debt, people familiar with the matter said.

The talks have so far failed to produce a deal and they may not lead to one, some of the people said.

Should the companies combine, the new group would have over $70 billion in annual revenue and some 21,000 fast-food joints, gas stations and grocery stores in more than 30 countries. It would bring together EG’s network in the U.K., Western Europe and Australia with Couche-Tard’s in the U.S., Canada, Northern Europe and a smattering of other countries.

The combined company would remain headquartered in Couche-Tard’s home of Laval, Quebec, a Montreal suburb, some of the people said.

Toronto-listed Couche-Tard, worth roughly $50 billion, and privately held EG Group—controlled by the billionaire Issa brothers and private-equity firm TDR Capital—have been haggling over price, some of the people said. Talks have run hot and cold in recent weeks.

Couche-Tard was started in 1980, when

Alain Bouchard,

who remains chairman, opened a single convenience store in his hometown province of Quebec. (The name roughly translates to “night owl” in the native French.) The company consolidated Canadian convenience-store chains throughout the 1990s and entered America in 2001. It bought Pantry Inc., the owner of Kangaroo Express stores, in 2015.

But Couche-Tard has been stymied in its pursuit of a needle-moving deal. Casey’s Retail Co. fended off its hostile takeover attempt in 2010. It was outbid in 2020 for the Speedway chain of convenience stores. And last year the French government shot down its $20 billion deal for grocer

Carrefour SA

EG began as Euro Garages, founded in 2001 by the brothers Mohsin and

Zuber Issa,

and is half-owned by TDR. It merged with a TDR-owned Dutch convenience-store chain in 2016 and has continued snapping up locations:

Kroger’s

U.K. business, Esso’s Italian gas stations and New England-based Cumberland Farms grocery stores.

EG’s owners, which also count U.K. grocery-store chain Asda among their holdings, are currently bidding in an auction for

Walgreens Boots Alliance Inc.’s

U.K. drugstore chain, according to people familiar with the matter. The business, known as Boots, could fetch a price in the neighborhood of $10 billion.

Write to Liz Hoffman at liz.hoffman@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

Appeared in the April 30, 2022, print edition as ‘Minimart Retailers In Talks For Merger.’