If Couche-Tard acquires Carrefour the convenience store operator would gain exposure to the supermarket segment. ©AFP/File LOIC VENANCE

Paris (AFP) – Canadian convenience store operator Couche-Tard said Wednesday it had made a non-binding offer for Carrefour that values the French supermarket group at more than 16 billion euros ($19.5 billion).

“The terms of the transaction are under discussion and remain subject to diligence, but the consideration is currently expected to be in cash in large majority,” Couche-Tard said in a statement.

The firm, which also operates stores under the Circle K and On the Run brands, said its friendly offer was 20 euros per share. Given the number of Carrefour shares in circulation, the offer values the firm at over 16 billion euros.

Carrefour’s shares shot over 13 percent higher on Wednesday to 17.52 euros just before trading wrapped up for the day. The offer is considerably higher than the 14 euros around which the supermarket giant’s shares have fluctuated for the past six months.

French Economy and Finance Minister Bruno Le Maire told state-owned France 5 television later: “A priori, I am not in favour of this operation.”

Le Maire added that Carrefour, a privately owned commercial icon known throughout the country, was “an essential link in food security for the French, of food sovereignty.”

Couche-Tard, which had a market capitalisation of roughly CAN$46 billion ($36 bn, 30 bn euros) as of Tuesday, said there was no certainty at this stage the discussions would result in an agreement or transaction.

“In considering strategic transactions, Couche-Tard will remain focused on creating stakeholder value,” it added.

A internal Carrefour document seen by AFP said the firm’s management would examine the Couche-Tard offer to see whether it is advantageous for the group and its stakeholders.

Carrefour has more than 12,300 stores of various formats in more than 30 countries, and in 2019 generated a net profit of 1.3 billion euros on revenue of 80.7 billion euros.

Couche-Tard has a worldwide network of more than 14,200 stores. It earned a net profit of $2.4 billion on sales of $54 billion in its non-calendar 2019 fiscal year.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.