Alimentation Couche-Tard Inc. expects to enter into an agreement through one of its wholly-owned subsidiaries, Circle K, creating a joint venture with Shell Oil Products U.S. to operate about 100 convenience stores in the greater Chicago metropolitan area.
The transaction is subject to final management approvals of both companies, standard regulatory approvals and closing conditions and is expected to close by the end of 2009. An agreement between the parties does not allow the details of the Joint Venture to be disclosed at this time.
Of the 100 convenience stores, 89 stores are currently operated by third party operators under an operator agreement with Shell, including 32 operated under the Circle K banner by Couche-Tard’s Midwest Division. The remaining 11 locations currently operate as Shell retail marketers under a retail lease agreement. The majority of the 100 stores would be operated by Couche-Tard’s Midwest Division under the Circle K banner.
Shell motor fuel and branded products would continue to be marketed at all 100 locations, while all 100 stores held by Shell would be transferred over to the Joint Venture through a combination of purchased and contributed fee and lease sites.
“These stores are located in the third largest city in the U.S. Strategically, this acquisition would be a complement to our expansion and growth plans for the Midwest Division. In addition to being an excellent fit within our current operating framework, it would also provide a much larger presence and would allow us to more easily target our growth in the greater Chicago metropolitan area”, said Darrell Davis, vice-president of operations for Circle K Midwest Division.