Age: 75. Personal fortune: $10 billion solely from his shares in Alimentation Couche-Tard, headquartered in Laval. Nevertheless, Alain Bouchard is not done expanding his empire.
Together with his associates from the Couche-Tard management, the founder and CEO is now aiming to acquire the giant 7-Eleven, which operates 86,000 convenience stores across 19 countries. A “friendly and non-binding proposal” has been made to the Japanese multinational Seven & i Holdings, the operator of 7-Eleven.
This acquisition would enable Alain Bouchard to emerge as the undisputed King of convenience stores worldwide. It would be his most significant victory!
With sales reaching $94 billion and a net income of $3.7 billion, Alimentation Couche-Tard currently operates more than 16,700 stores (including 13,100 with gas stations) in 31 countries and employs 149,000 people.
COUCHE-TARD VS 7-ELEVEN
Seven & i Holdings has revenue similar to Couche-Tard. This means that Couche-Tard could potentially double its revenue if the deal is completed.
Currently, Alimentation Couche-Tard’s market capitalization stands at $78 billion, while Seven & i Holdings is around $50 billion.
Despite the enormity of this potential acquisition, analysts seem optimistic. Couche-Tard could finance the massive transaction through methods such as a public offering of shares and private placements with institutional investors.
PITFALLS
However, will Couche-Tard encounter significant obstacles in acquiring 7-Eleven?
It’s worth recalling that Couche-Tard had to abandon its plans to acquire the Carrefour Group, the French hypermarket giant, in 2021 due to opposition from the French government.
Another possible hurdle? If Seven & i Holdings indicates even the slightest interest in selling its holdings, a bidding war could ensue. Other potential buyers would likely emerge, driving up the price.
PROFITABLE FOR THE CASH FUND
Among the institutional investors who would likely be involved, the Caisse de dépôt et placement du Québec stands out.
The Caisse has consistently supported Alain Bouchard in his global venture into the convenience store market.
And the results have been impressive!
For evidence, at the beginning of 2022, the Caisse held 57.1 million shares of Couche-Tard, valued at $2.48 billion.
Following share buybacks by Couche-Tard that amounted to $1.7 billion, the Caisse reduced its holding to 32.75 million shares, now valued at $2.69 billion.
The Fund has thus realized a gain of $1.9 billion to date, and all this in under three years.
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The Management
The Ambitious Move of Alain Bouchard: Alimentation Couche-Tard Eyes 7-Eleven Acquisition
Age: 75. Personal fortune: $10 billion just from his shares of Alimentation Couche-Tard, headquartered in Laval. Despite his success, Alain Bouchard isn’t finished conquering the convenience store world.
Current Landscape of Alimentation Couche-Tard
Alimentation Couche-Tard operates over 16,700 stores in 31 countries, including approximately 13,100 that also feature gas stations. In the last fiscal year, the company reported sales of $94 billion and a net income of $3.7 billion, employing around 149,000 individuals worldwide.
The Target: 7-Eleven
In a bold move, Alain Bouchard and his team at Couche-Tard have submitted a “friendly and non-binding proposal” to acquire 7-Eleven, operated by Japanese retail giant Seven & i Holdings. With 86,000 convenience stores spread across 19 countries, acquiring 7-Eleven could redefine Couche-Tard’s position in the global market.
Financial Implications of the Acquisition
If this acquisition goes through, Couche-Tard’s revenues could potentially double. The financial metrics are promising:
- Couche-Tard Market Capitalization: Approximately $78 billion
- 7-Eleven (Seven & i Holdings) Market Capitalization: Around $50 billion
Financing the Mega-Transaction
Analysts remain optimistic about Couche-Tard’s financial structure, suggesting that the company could finance the acquisition through various methods, including:
- Public offerings of shares
- Private placements with institutional investors
- Strategic partnerships
Among potential investors, institutional players such as the Caisse de dépôt et placement du Québec may be engaged to support the deal, having previously backed Bouchard through various ventures.
Challenges Ahead
However, the path to acquiring 7-Eleven may not be devoid of obstacles. For instance, Couche-Tard faced significant challenges during its attempt to acquire Carrefour Group. Key hurdles include:
- Regulatory Scrutiny: Just as with the Carrefour bid, government interventions may derail Couche-Tard’s plans.
- Bidding Wars: If the deal becomes widely known, other potential buyers may enter the fray, escalating costs for Couche-Tard.
Operational Synergies
The combination of Alimentation Couche-Tard and 7-Eleven could create new synergies:
- Greater Market Presence: Strengthened brand recognition in multiple markets.
- Operational Efficiency: Improved logistics and supply chain management.
- Customer Experience: Opportunity for enhanced retail experiences through combined resources.
Performance of Institutional Investments
The Caisse de dépôt et placement du Québec has played a supportive role in Alain Bouchard’s agenda, achieving remarkable returns on its investments. Current holdings include:
- Number of Couche-Tard Shares (2022): 57.1 million shares valued at $2.48 billion
- Current Holdings: 32.75 million shares valued at approximately $2.69 billion
With strategic buybacks executed by Couche-Tard worth $1.7 billion, the Caisse has realized a gain of a staggering $1.9 billion in less than three years.
Case Study: Couche-Tard’s Global Expansion
To better understand Couche-Tard’s trajectory under Bouchard’s leadership, let’s look at a case study of its international expansion:
Global Footprint
Couche-Tard has made several strategic acquisitions to enhance its market share, including:
| Year | Acquisition | Impact |
|---|---|---|
| 2003 | Phoenix, Arizona-based Circle K | Expanded footprint in the U.S. |
| 2007 | Mac’s Convenience Stores | Strengthened Canadian market presence |
| 2017 | European chain Statoil Fuel & Retail | Broadened European operations |
Success Stories
The successful integration of these businesses highlights Couche-Tard’s capacity to improve profitability and leverage synergies, further supporting the potential ramifications of acquiring 7-Eleven.
Conclusion: A Look Ahead
As Alain Bouchard and Alimentation Couche-Tard aim to extend their empire by acquiring 7-Eleven, several dynamics are at play. The financial benefits seem promising, and institutional investors are likely to support the venture. However, the challenges and competition from potential bidders necessitate a cautious approach.
Alimentation Couche-Tard’s strategy encapsulates a bold ambition that could potentially reshape the convenience store landscape globally. Given its track record and the unfolding developments, this acquisition could signal a transformative era for both Couche-Tard and the convenience store industry at large.
