Couche-Tard, Carrefour End Merger Talks Amid French Objections

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Canada’sAlimentation Couche-Tard Inc. and France’sCarrefour SA abandoned talks on a proposed $20 billion merger following stiff opposition from the French finance minister, and will look instead at forming a looser alliance.

“The opportunity for operational partnerships with Carrefour will further our journey towards becoming a leading global retailer,” Brian Hannasch, president and chief executive officer of Couche-Tard, said in ajoint statement Saturday.

A merger would have created a retail powerhouse, combining Couche-Tard’s North America-focused network of 14,200 convenience stores with Carrefour’s sizable European operations, which include hypermarkets and smaller outlets.

The decision to stop the negotiations comes after top executives of the Quebec-based company flew to Paris to offer the government several sweeteners, including billions of euros of investment in Carrefour stores, no job cuts for at least two years and dual stock listings in France and Canada.

It was not enough to persuade Finance Minister Bruno Le Maire, whotold executives in a private meeting Friday he was standing by his position that a takeover would be bad for France. Earlier that day, Le Maire said on BFM TV: “To sum up: it’s a no. A courteous no, but a no that is clear and definitive.”

Couche-Tard, Canada’s largest retailer by market value, faced hurdles from the outset for its offer of 20 euros per share. Le Maire signaled that even if both parties agreed to the transaction, regulators might still block it.

Carrefour shares ended 2.9% lower at 16.61 euros in Paris on Friday. Couche-Tard rose 4.8% to C$37.98 in Toronto.

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