Dive Brief:
- Alimentation Couche-Tard and Seven & i Holdings are progressing on merger talks, which could see a conclusion in the near future, Couche-Tard’s President and CEO Alex Miller said during the company’s fourth-quarter earnings call on Thursday.
- Miller emphasized that Couche-Tard remains engaged with Seven & i on several fronts, including due diligence, management meetings and Federal Trade Commission processes. He said the companies are setting a timeline for when they should know whether or not a deal can materialize, and that this timeline will be “shorter rather than longer.”
- Ten months have passed since Couche-Tard shocked the c-store industry with its bid for Seven & i, and industry stakeholders have spent the past year considering what the megadeal would mean for the future of convenience retailing.
Dive Insight:
Miller’s comments on Thursday come during a quiet period for observers of the two companies, as neither has publicly shared updates since their signing of nondisclosure agreements back on May 1.
At the time, the companies said these NDAs would let them share more information, progress transaction discussions, facilitate due diligence and collaborate on plans to engage with regulators. These NDAs came a few weeks after the companies began signing similar agreements with potential buyers of the thousands of c-stores they’d have to divest if a deal were to materialize.
In Thursday’s call, Miller said the companies have outlined “what we believe is a clear path to U.S. regulatory approval,” and that Couche-Tard is working with Seven & i’s special committee overseeing the deal and its leader, Paul Yonamine, on the timeline for when talks should close.
Miller declined to comment when an analyst asked what the likelihood is of a deal coming to fruition.
“With Seven & i, we are engaged,” Miller said on Thursday. “We've signed the NDA. We are engaged in diligence. We are engaged in management meetings. We are engaged on the divestiture.”
Talks of the proposed merger come during transitional periods for both companies, which are overhauling their operations to place food at the forefront of their c-stores, especially in the U.S. 7-Eleven is in the process of opening hundreds of large format, food-focused stores that offer a larger product assortment and expanded food and beverage offerings compared to the rest of its locations, while Couche-Tard is expanding its Fresh Food, Fast program into hundreds of stores.
During Thursday’s call, Miller said Couche-Tard’s foodservice program has reached 6,200 Circle K stores globally, and that its value meal deal program is soaring, with 500,000 meals having been sold during Q4 in the U.S. — a 35% jump from last quarter, he added.
