Alimentation Couche-Tard Inc., based in Laval, Quebec, has set its sights on a new acquisition target after unsuccessful attempts to purchase a French grocer and a major global convenience store chain. The company is now eyeing a takeover of Zabka Group, a Polish convenience store operator.
Couche-Tard has proposed a deal valued at over $12 billion for a controlling stake in Zabka, pricing each share at 32 Polish zloty, approximately $11.90 Canadian. If successful, this acquisition would be Couche-Tard’s largest to date and align with its goal of significant expansion.
Zabka, named after the Polish word for frog, operates more than 13,000 convenience stores in Poland and Romania. Meanwhile, Couche-Tard, known for its Couche-Tard and Circle K stores and recognizable owl mascot, boasts 17,300 locations across 27 countries, with nearly 400 stores in Poland.
Both companies share similarities in their product offerings, including a wide range of beverages and snacks, with a recent focus on expanding their hot food selections. Zabka stands out for its quick-serve meals, with one in five transactions including food items, while Couche-Tard shines in beverages and fuel sales, operating around 13,200 locations with gas stations.
Couche-Tard’s CEO, Alex Miller, highlighted the complementary strengths and customer-centric approach of the two companies in a recent analyst call discussing the proposed acquisition. He anticipates unlocking about $250 million US in cost savings within three years of finalizing the deal.
The pursuit of Zabka has been a long-term consideration for Couche-Tard, with executives, including founder Alain Bouchard, expressing interest in the company for over a decade. Despite previous acquisition attempts such as the failed bid for Carrefour SA in 2021 and the abandoned proposal for Seven & i Holdings in 2024, the focus has now shifted to Zabka.
The transaction is pending regulatory approvals and is projected to conclude by December. The extent of Couche-Tard’s ownership in Zabka will depend on shareholder acceptance of the offer. Should Couche-Tard secure at least 95% of Zabka’s total voting rights, it may delist the company from the Warsaw Stock Exchange, where Zabka has been trading for two years.
Analysts view the potential acquisition as a strategic move that could significantly advance Couche-Tard’s growth objectives. Irene Nattel, an analyst at RBC Capital Markets, described Miller’s approach as both bold and calculated, emphasizing the potential long-term benefits for the company.
Overall, Couche-Tard’s pursuit of Zabka represents a significant milestone in its expansion strategy, signaling a strategic leap forward in the competitive convenience store market.