Dive Brief:
- Alimentation Couche-Tard has agreed to buy controlling interest in Żabka Group, Poland’s largest convenience retailer, according to an announcement on Friday.
- The Canadian retailer will pay about $8.48 per share, or about $8.6 billion, and has support from owners of approximately 57% of Żabka’s outstanding shares, according to the announcement.
- Couche-Tard said the deal, which encompasses more than 13,000 stores in Poland and Romania, would be the largest in its history and is expected to close by the end of December.
Dive Insight:
The transaction will give Couche-Tard, parent company of Circle K, more of a presence in Poland, where the retailer currently has a little under 400 stores. Couche-Tard does not have a presence in Romania yet.
"This is a transformational investment for Couche-Tard and an important milestone in our growth journey," said Alex Miller, president and CEO of Alimentation Couche-Tard.
Couche-Tard’s transaction is unanimously supported by Żabka's key executive managers and shareholders, including private equity firms CVC Capital Partners and Partners Group, which have entered into separate agreements with the retailer to sell their shares.
While Couche-Tard’s recent attempt to buy 7-Eleven parent company Seven & i Holdings didn’t come to fruition, it showed the company was ready and willing to make a big move. This agreement gives it access to a large, tech-forward retailer.
Żabka's stores see about 4.3 million transactions per day on average and boast one of Europe’s “most advanced” convenience retail platforms, with about 11.7 million users across its digital channels, according to the announcement.
“We are committed to supporting the continued growth of the Żabka business while drawing from its strengths in areas such as food, digital engagement, customer loyalty, private brand, supply chain, logistics and innovation, and as a result, further accelerating our Core + More strategy,” said Miller.
For the 12 months that ended March 31, Żabka generated about $7.4 billion in revenue and $1.1 billion in adjusted EBITDA. Couche-Tard said it has identified about $250 million in cost savings that could be fully achieved by the third year following the deal’s closing.
The deal comes shortly after Seven & i Holdings announced that it had decided against investing in the Polish retailer.
