Alimentation Couche-Tard has submitted a AU$8.6bn (US$5.8bn) bid to purchase Caltex Australia.
Caltex battling profit downturn
The Alimentation Couche-Tard offer is subject to board approval and follows another offer that was made in early October and rejected. Caltex has been repurposing its business in Australia due to a significant downturn in profit margins and already plans to look to improve the balance sheet via creating a property trust for 250 of its sites. Brian Hannasch, Couche-Tard’s President and Chief Executive, said, “We believe this is a very compelling offer for Caltex shareholders. The company has been looking into the Asia-Pacific region for several years as a potential market.”
Caltex is a major fuel and convenience player in Australia
Caltex in Australia operate around 2,000 forecourts and has a partnership with Woolworths. This involves Caltex providing the fuel to Woolworths owned and operated petrol sites, Woolworths customers getting fuel discounts and reward points from over 700 Caltex sites, but also Woolworths acting as a wholesale food supplier to the entire Caltex network, with plans to roll out 250 new Caltex-operated 'Metro' convenience stores over the next few years.
Will the Circle K brand come to Australia?
Couche-Tard has 16,000 pertol forecourts across Canada, the US, Europe, Mexico, Japan, China and Indonesia and is well known for its Circle K convenience stores. If the takover is accepted, it could have a big impact on what the future of fuel convenience will look like in Australia.