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Corner Store Owner Couche-Tard in Merger Talks With Europe’s Carrefour

PARIS—Canada’s Alimentation Couche-Tard Inc. said it has made a 16.1-billion-euro offer, equivalent to $19.66 billion, to buy French hypermarket chain Carrefour SA, as large retailers come under pressure to transform their bricks-and-mortar footprint amid pandemic restrictions on shopping and disruption from tech giants.

A merger would combine two companies with very different formats and geographical footprints into a $53 billion giant, making it the world’s third largest grocery retailer, behind Walmart Inc. and Lidl owner Schwarz Group. Retailers are in a rush to find new ways to get food to customers ordering online as the spread of Covid-19 has massively accelerated online grocery shopping, including click-and-collect.

Carrefour—which opened its first store in 1960—is one of Europe’s largest grocery retailers. It also operates hypermarkets and supermarkets in Asia and Latin America. The 31-year-old Couche-Tard is the largest independent convenience store operator in North America, operating under brands such as the Corner Store, Circle K and Holiday. It also operates a network of gas stations in Europe and has stores there and elsewhere in the world.

Carrefour shares were up 15.5% in Paris on Wednesday. Couche-Tard shares were down 10.05% in Toronto.

Jefferies analyst James Grzinic said he was a little blindsided by the talks, saying it was hard to map out synergies because overlap between the retailers is virtually nonexistent. He described the talks as a major departure from Couche-Tard’s stated strategy of maintaining return on capital employed at above 15%.

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