Canada’s Alimentation Couche-Tard is set to enter the huge Asian market after agreeing on a deal to acquire the Circle K chain in Hong Kong for HK$2.79bn ($360m).
Circle K HK, a subsidiary of Convenience Retail Asia Limited (CRA), operates a network of convenience stores in the region, with 340 company-operated sites in Hong Kong and 33 franchised sites in Macau.
Couche-Tard stated that the deal represents a significant milestone as it provides the company with a platform in Asia from which to launch its regional growth ambitions.
Circle K HK currently holds the second-largest market share in Hong Kong with “meaningful room to grow organically”. Circle K HK has also developed an expertise in loyalty, with approximately 1.6 million ‘OK Stamp It’ members, and has established a strong private label offering.
Couche-Tard said it expects to benefit from Circle K HK’s experienced management team to gain access to further opportunities in the Asia-Pacific region. Alain Bouchard, Executive Chairman of Couche-Tard, commented: “I have followed Circle K Hong Kong’s progress closely for decades and deeply admire its leadership team and retail expertise.
I look forward to welcoming their team members and stores into the Couche-Tard family and have no doubt that together we can reach millions more customers in Hong Kong and across Asia as we move forward in our journey to become the world’s preferred destination for convenience and fuel.”
Victor Fung, Chairman of CRA, added: “The Board fully endorses the sale of Circle K Hong Kong to our long-term partner and franchisor. This is a win-win for both companies. Our investors will gain from a good return on their investment and Couche-Tard will benefit from a first-class organization of dedicated and loyal team members who have contributed to the success of Circle K in Hong Kong.”
The deal is expected to close by the end of the year, subject to approval by CRA shareholders and regulatory clearances.