(Bloomberg) -- Alimentation Couche-Tard Inc., the Canadian convenience-store giant that owns the Circle K chain, is exploring a potential acquisition of French grocer Carrefour SA, people with knowledge of the matter said.
Couche-Tard has made an initial approach to Carrefour to discuss a combination, according to the people, who asked not to be identified because the information is private. There’s no certainty the deliberations will lead to a transaction, the people said.
Shares of Carrefour have risen 10% in Paris trading this year, giving the company a market capitalization of 12.6 billion euros ($15.4 billion) at Tuesday’s close. Couche-Tard is valued at almost $37 billion in Toronto. Representatives for Couche-Tard and Carrefour couldn’t immediately be reached for comment.
Acquiring Carrefour would help Couche-Tard diversify into the supermarket business and expand its presence in Europe and Latin America. Any transaction would add to the $182 billion of deals announced in the retail industry over the past 12 months, according to data compiled by Bloomberg.
After years of stagnation in its core French business, Carrefour has been seeking a turnaround under Chief Executive Officer Alexandre Bompard. He’s been cutting costs by scaling back the company’s giant hypermarkets, which sell everything from produce to clothing and housewares, while expanding in e-commerce and organic food.
Couche-Tard has a network of more than 9,000 convenience stores in North America, most of which also offer fuel retail, according to its website. It also had about 2,700 locations in Europe as of October last year.
The company has been expanding through acquisitions, agreeing in 2016 to buy U.S. gas-station operator CST Brands Inc. for around $4 billion. Couche-Tard gained a foothold in Scandinavia and the Baltic region through its 2012 purchase of Statoil Fuel & Retail ASA.