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Canada’s Alimentation Couche-Tard to buy CST Brands for $3.67 billion

Posted by: Admin | Posted on: August 22nd, 2016 | 0 Comments

Canadian convenience store operator Alimentation Couche-Tard Inc (ATDb.TO) said it would buy U.S. convenience store retailer CST Brands Inc (CST.N) for about $3.67 billion, as the company looks to strengthen its U.S. operations.

Couche-Tard is offering CST Brands shareholders $48.53 per share in cash, a premium of 2.15 percent to the stock’s Friday close.

However, the offer represents a premium of 41.9 percent to CST’s closing price on March 3, the last trading day before the company said it would explore strategic alternatives.

Including debt, the deal is valued at about $4.4 billion, the company said.

“With this transaction we would strategically strengthen our positioning in both the “sun belt” and the east coast of North America,” Couche-Tard Chief Executive Brian Hannasch said in a statement.

Sun Belt refers to the region that stretches across the southern and southwestern portions of the United States.

Couche-Tard said it would sell some Canadian assets of CST to Parkland Fuel Corp (PKI.TO) for about $750 million, after the deal closes, expected in early 2017.

The assets include CST’s self-service fueling stations, commercial and home energy business, and a number of company-operated stores to be determined following the Competition Bureau of Canada’s review of the transaction.

Couche-Tard said it will finance the deal with available cash, existing credit facilities and a new term loan.

(Reporting by Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila)

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