Couche-Tard reported in lead to buy Corner Store chain

New York | Reuters –– Convenience store operator Alimentation Couche-Tard is in the lead to acquire U.S.-based convenience store retailer CST Brands, according to two sources familiar with the matter.

San Antonio-based CST owns and operates convenience stores and gas stations in Canada and the U.S., and it controls the general partner of gas station company CrossAmerica Partners LP.

CST declined to comment.

In a statement Tuesday, Couche-Tard said it is in discussions “with third parties regarding possible business transactions.

“No formal agreements have been reached,” it added.

Laval, Que.-based Couche-Tard’s shares closed up 3.1 per cent, while CST’s stock ended the day 6.3 per cent higher.

The move highlights the level of consolidation in the convenience store sector and reinforces Couche-Tard as one of the most acquisitive players in the industry.

CST’s operations in Canada cover over 870 retail sites, mainly under the Corner Store and Depanneur du Coin brands, in Ontario, Quebec and Atlantic Canada.

Its Canadian stores’ offerings include standard convenience-store snacks and beverages and, in many cases, market sections offering sandwiches, salads and fresh produce.

Couche-Tard’s operations in Canada, meanwhile, are under the Couche-Tard, Mac’s and Circle K brands. The company operates over 1,400 stores in 10 provinces and the Northwest Territories and supplies almost 400 affiliated stores.

The news comes about two months after Reuters reported that Couche-Tard and Japan’s Seven + i Holdings Co. Ltd. had submitted offers to acquire CST.

The Wall Street Journal first reported that Couche-Tard was close to buying CST.

— Reporting for Reuters by Lauren Hirsch; writing by John Tilak. Includes files from AGCanada.com Network staff.