Hong Kong’s Circle K convenience-store network is to be taken over by Canadian c-store operator Alimentation Couche-Tard (ACT), the brand’s owner.
ACT has reached an agreement to pay US$360 million to acquire the business from Convenience Retail Asia, Circle K’s Hong Kong franchisee, adding 340 company-owned stores and 33 franchised sites in Hong Kong and Macau to ACT’s 15,000-strong network across Canada, the US, Mexico, Europe, Japan, China and Indonesia.
“Circle K Hong Kong is one of the best convenience store operators in Asia and will be an excellent fit within our company,’ said Brian Hannasch, president and CEO of ACT.
“We are excited to partner further with their highly advanced team in terms of innovation, loyalty, private label, retail execution and ability to grow market share. Upon closing of this transaction, Couche–Tard will reach a milestone in its strategic ambition of entering the high growth Asia–Pacific market with a first-rate management and operations team, which has the credibility, experience and capabilities to support future expansion in the region.”
Alain Bouchard, founder and executive chairman of Couche-Tard’s board, said in a statement he had followed Circle K’s progress for decades and admires the management of the chain, which is second in the territory in market share behind 7-Eleven.
“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.”
CRA chairman Victor Fung said the company’s board fully endorses the sale of Circle K Hong Kong to its 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 organisation of dedicated and loyal team members who have contributed to the success of Circle K in Hong Kong.”
Proceeds of the sale will be distributed to shareholders via a special dividend.
CRA will continue to operate its remaining retail businesses after the sale – the Saint Honore bakery chain in Hong Kong, Macau and Mainland China, the Mon Cher bakery in Hong Kong, and the Zoff fast-fashion eyewear brand in Hong Kong.
In a letter to shareholders announcing the deal, CRA said management considers the remaining brands are “more suited to leveraging the use of internet and online platform, to be more appealing to middle-income customer base (as opposed to tourists, students and office workers) and to be relying less on logistical set up and supply chain infrastructure”.
CRA CEO Richard Yeung, says having the brand owner directly involved in the business will create new opportunities for the brand and our staff.
The transaction, expected to close by December 31, is subject to usual closing conditions, including the CRA shareholder approval and regulatory clearances.