(July 31): Alimentation Couche-Tard Inc agreed to buy Polish retailer Zabka Group SA for about 32.6 billion zloty (US$8.7 billion or RM35.55 billion), expanding the Circle K owner’s European footprint with its biggest-ever acquisition.

Couche-Tard will launch a voluntary tender offer for Zabka at the equivalent of US$8.48 per share, the Canadian retailer said on Friday. Owners of about 57% of Zabka have agreed to the deal, the companies said.

Zabka shares advanced 12% in Warsaw, to just above the offer price of 32 zloty.

The deal marks a renewed focus on European expansion for Couche-Tard, whose effort to buy grocery chain Carrefour SA was blocked by French regulators in 2021. Most recently it sought to buy competitor Seven & i Holdings Co, the Japanese owner of the 7-Eleven convenience chain, which itself has courted Zabka.

Couche-Tard’s offer doesn’t fully reflect Zabka’s long-term potential, said mBank analyst Janusz Pieta, who values the Polish company at 33 zloty a share. 

“In a change-of-control transaction we would typically expect a premium to our fair value estimate, rather than a discount,” Pieta said. “Furthermore, earlier reports of interest from Seven & i Holdings indicate that Zabka is a strategic asset that has attracted attention from multiple industry participants.”

Seven & i this month abandoned discussions over a potential investment in Zabka, ending what could have been a competing bid for Poland’s largest convenience-store chain. Seven & i said it was unable to reach a deal in the best interests of its shareholders.

Couche-Tard’s unsuccessful attempt to buy Seven & would have dramatically expanded its global presence. The Canadian retailer spent nearly a year trying to acquire the Japanese owner of 7-Eleven after making an unsolicited takeover proposal in 2024.

Zabka executives and private equity owners including CVC Capital Partners and Partners Group, who together hold around 57% of its existing shares, have “unanimously backed” the Couche-Tard offer, the companies said. The tender is expected to be completed by December.

Acquiring Zabka would deepen Couche-Tard’s presence in Poland, where it already operates about 400 Circle K convenience stores and fuel stations.

Launched in 1998 and modeled on 7-Eleven, Zabka is an ubiquitous presence in Poland, with around 13,000 brick-and-mortar shops, most of them franchised. The company also entered the Romanian market in 2024.

Zabka, which reported revenue of US$7.4 billion in the 12 months through March, had risen 28% this year before the Couche-Tard offer. It has set its sights on becoming Europe’s convenience retail leader, and had expressed openness to bringing in a new strategic investor.

It has been pushing a digital strategy through its retail app while expanding its food-to-go offering.

Pro-forma combined revenue of Zabka and Couche-Tard over the past 12 months amounts to US$83.9 billion, with adjusted earnings before interest, taxes, depreciation and amortization of US$7.8 billion, the statement said. 

If the Canadian company buys at least 95% of Zabka’s shares, it will aim to delist the company from the Warsaw Stock Exchange, where it debuted in 2024.

JPMorgan Chase & Co is advising Couche-Tard and Goldman Sachs Group Inc working with Zabka on the transaction.

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