Dive Brief:

• Alimentation Couche-Tard, the parent company of Circle K c-stores, has agreed to acquire 2,193 retail sites from European fuel giant TotalEnergies for $3.3 billion, according to a Thursday announcement.
• If approved, Couche-Tard will grow its European footprint by 80% with the move, which is expected to close before the end of the calendar year, President and CEO Brian Hannasch said during the company’s third-quarter earnings call Thursday. It includes 1,195 locations in Germany, 566 in Belgium, 387 in the Netherlands and 45 in Luxembourg, with about 68% of the sites being company-owned, while the rest are dealer-owned.
• Couche-Tard’s latest move comes as it continues to grow via acquisitions in the U.S. Just last month, the retailer agreed to acquire the 45-location Big Red Stores c-store chain in Arkansas in a deal that’s also expected to close this year.

Dive Insight:

Couche-Tard had been planning this deal for the past two years as it has looked for more opportunities in Europe, Hannasch said during the call. When it came to TotalEnergies’ sites, Couche-Tard was attracted to the car wash operations — the stores have a combined 1,000 car washes — and the potential to grow foodservice and in-store sales, Hannasch said.

Hannasch said that while Couche-Tard’s existing European arm has grown its foodservice operations to 25% of its total business, foodservice at these TotalEnergies sites is “significantly lower” than that.

“We believe our European model that we have, both on the food and merchandise side, that we've evolved over the last decade, will resonate in these markets,” Hannasch said.

Laval, Quebec-based Couche-Tard operates over 2,700 stores in eight European countries. Its biggest market is Sweden, with 744 stores. If the TotalEnergies move is approved, Germany will become Couche-Tard’s largest European market.

It remains unclear how or if the acquired sites will be rebranded. When asked about this on the earnings call, Hannasch said that’s “to be determined,” but that a potential rebrand would “more likely show up on the store as opposed to the forecourt.” TotalEnergies noted in a Thursday announcement that the fuel stations will remain under the TotalEnergies brand as long as they still supply the fuel to these sites for at least five years.

“Over the coming months, we'll firm up those plans,” Hannasch said of a potential rebrand on the call.

For TotalEnergies, selling to Couche-Tard will let the oil company turn these locations from places that simply sell fuel to “full-fledged service hubs,” Chairman and CEO Patrick Pouyanné said in the announcement.

"In Europe, the transformation of mobility is changing the way customers use service stations,” he said. “This deep trend means that new services and new activities need to be developed, notably in the stores.”

The interest in TotalEnergies’ car washes also continues Couche-Tard’s expansion in that area. In December, it acquired the 65-location True Blue Car Wash chain. 

Courbevoie, France-based TotalEnergies produces and markets oil and biofuels, natural and green gas, renewable fuel and electricity in more than 130 countries. As a company, it has more than 100,000 employees.