Couche-Tard enters key market

Article Excerpt

ALIMENTATION COUCHE-TARD $44.36 is a buy. This established retailer (Toronto symbol ATD.B; TSINetwork Rating: Average) (www.couchetard.com; Shares outstanding: 1.11 billion; Market cap: $50.4 billion; Dividend yield: 0.6%) operates 11,988 convenience stores across North America and Europe. The company has now agreed to buy Convenience Retail Asia for $360 million. Convenience Retail Asia, through its Circle K HK unit, operates a network of Circle K-licensed convenience stores. Of those, 340 are company-operated sites in Hong Kong and 33 are franchised sites in neighbouring Macau. Circle K HK currently holds the second-largest market share in Hong Kong, one of the most economically developed markets in Asia. It’s also one of the world’s most densely populated. Even so, there is still room to expand there. Beyond that, Couche-Tard sees the acquisition as a springboard to expand into Asia. Furthermore, Circle K HK has developed expertise in loyalty programs, with approximately 1.6 million “OK Stamp It” members. It has also established a strong private-label program and…

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