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Alimentation Couche-Tard Is Buying CST Brands for $3.67 Billion

August 22, 2016, 2:15 PM UTC
A vendor carts Pepsi products into a Circle K store in Chula
A vendor carts Pepsi products into a Circle K store in Chula Vista, California, Wednesday, Aug. 29, 2007. Alimentation Couche-Tard Inc., North America's second-biggest convenience-store operator, said first-quarter profit rose 55 percent on a lower tax bill.
Photograph by Sandy Huffaker — Bloomberg via Getty Images

Canadian convenience store operator Alimentation Couche-Tard said it would buy U.S. convenience store retailer CST Brands (CST) 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% to the stock’s Friday close.

However, the offer represents a premium of 41.9% 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 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.