After being unsuccessful in acquiring a French grocery chain and a prominent global convenience store network, Alimentation Couche-Tard Inc. has set its sights on a new acquisition target. The company, headquartered in Laval, Quebec and known for its Couche-Tard and Circle K stores, revealed its intention to acquire the Polish convenience store operator Zabka Group.
Alimentation Couche-Tard proposed a buyout exceeding $12 billion for a majority stake in Zabka, valuing the offer at 32 Polish zloty, approximately $11.90 Canadian dollars per share. If the deal is finalized successfully, it will represent the largest acquisition in Couche-Tard’s history, fulfilling its objective of significantly expanding its business empire.
Zabka, named after the Polish word for frog, operates over 13,000 convenience stores in Poland and Romania. Alimentation Couche-Tard, recognized for its owl mascot, operates 17,300 stores across 27 countries, including nearly 400 locations in Poland.
Both companies share similarities in their product offerings, with a wide selection of beverages, snacks, and an increased focus on hot food offerings in recent years. While one in five transactions at Zabka includes a quick-serve meal and some stores are fully autonomous, beverages and fuel are the primary attractions at Couche-Tard, with approximately 13,200 locations featuring gas stations, a service not offered by Zabka.
During discussions about the proposed transaction, Couche-Tard CEO Alex Miller emphasized the collaboration of strengths and mutual commitment to enhancing customer service rather than one company instructing the other. Miller anticipates identifying around $250 million in cost savings within three years of completing the deal.
The acquisition of Zabka has been a long-time consideration for Couche-Tard, with founder and former CEO Alain Bouchard and other executives eyeing the company for at least 15 years, although their attention was diverted to other targets at various times.
In recent years, Couche-Tard pursued acquisitions, including a failed $20 billion bid for Carrefour SA in 2021 and attempts to purchase Seven & i Holdings, the parent company of 7-Eleven, in 2024. However, the company’s bid for 7-Eleven was withdrawn due to disagreements over valuation, engagement, and regulatory risks.
Following Bouchard’s suggestion to reassess Zabka, Couche-Tard revisited the opportunity, which ultimately led to the announcement of the offer. Zabka’s incoming CEO, Tomasz Blicharski, expressed openness to Couche-Tard’s proposals, noting the alignment in customer-centric approaches and shared focus on improving daily life.
Zabka’s executive managers and major shareholders, representing 57% of the outstanding shares, including private equity firms CVC Capital Partners and Partners Group, have unanimously endorsed the deal. The transaction is subject to regulatory approvals and is expected to be finalized by December, with the number of Zabka shares acquired by Couche-Tard dependent on investor responses.
Should Couche-Tard secure at least 95% of Zabka’s voting rights, the remaining shares will be bought out, and the company may be delisted from the Warsaw Stock Exchange. Couche-Tard is exploring options for Zabka’s future integration, considering either full integration or maintaining it as a publicly traded entity.
Analysts view Miller’s strategic approach as both ambitious and calculated, foreseeing significant progress in Couche-Tard’s long-term growth objectives if the acquisition is successful. Irene Nattel, an analyst at RBC Capital Markets, highlighted the potential benefits of the deal, emphasizing its strategic and financial rationale.
Overall, the proposed acquisition of Zabka by Alimentation Couche-Tard signifies a significant move in the company’s expansion strategy, aiming to capitalize on synergies and enhance its market presence.