Alimentation Couche-Tard Inc. is reportedly exchanging proposals in a multibillion-dollar combination with a British retailing giant that would feed its growth ambitions.
Analyst Irene Nattel of RBC Dominion Securities said a combination of two of the world’s largest convenience-store chains would be a “compelling potential transaction” and one that is consistent with Couche-Tard’s five-year plan to double its size. Li said the synergies would vary by geography. They would be significant in the U.S. where Couche-Tard has about 7,150 sites and EG has some 1,700 locations. But savings would be limited in Europe because of a lack of overlap with Couche-Tard’s presence strongest in Northern Europe and some other countries while EG is focused on the U.K. and Western Europe, along with Australia.