Convenience store giant Couche-Tard expressed disappointment after its bid to acquire 7-Eleven’s owner, Speedway, was rejected by the U.S. Federal Trade Commission (FTC).
In a statement released on Tuesday, Couche-Tard CEO Brian Hannasch said, “We are disappointed with the FTC’s decision, as we believe this transaction would have been beneficial for all parties involved, including consumers.”
The proposed acquisition, which was announced in August 2020, would have seen Couche-Tard acquire Speedway’s 3,900 stores for $21 billion USD. This would have expanded Couche-Tard’s presence in the U.S. market and solidified its position as the world’s second-largest convenience store operator.
However, the FTC raised concerns that the acquisition would reduce competition in the U.S. convenience store market, particularly in 16 states where both Couche-Tard and Speedway have a significant presence. The commission argued that this could lead to higher prices and reduced choices for consumers.
In response, Hannasch stated, “We respectfully disagree with the FTC’s analysis and believe this transaction would not have resulted in any significant anti-competitive effects.”
Couche-Tard has now terminated its agreement with Speedway’s owner, Marathon Petroleum Corp., and will not pursue any further legal action. The company also stated that it remains committed to its growth strategy and will continue to explore other opportunities for expansion.
Despite the setback, Couche-Tard’s stock price remained relatively stable, with only a slight decrease following the news.
This is not the first time that the FTC has blocked a major acquisition in the convenience store industry. In 2017, the commission prevented the merger of 7-Eleven and Sunoco’s convenience store businesses, citing similar concerns about reduced competition.
In the wake of the failed acquisition, Couche-Tard’s CEO expressed gratitude to the company’s employees and partners for their hard work and support throughout the process. He also assured shareholders that the company remains financially strong and will continue to pursue growth opportunities.
As for 7-Eleven’s owner, Speedway, it is now exploring other options for the company’s future, including a potential initial public offering (IPO).
In conclusion, while Couche-Tard may be disappointed with the FTC’s decision, the company remains determined to continue its growth trajectory and explore other avenues for expansion. The convenience store industry is a highly competitive market, and it is clear that the FTC is committed to ensuring fair competition for the benefit of consumers.
