Couche-Tard not big enough to acquire Valero retail business, says analyst

  • Couche-Tard not big enough to acquire Valero retail business, says analyst

    Analyst Peter Sklar of BMO Capital Markets has written in a report that Couche-Tard would only be able to acquire the Valero retail business if Valero decided to split the retail business into a set of smaller, regional units. The report estimates Valero’s entire 1030 store retail network is worth between $3.5 billion and $4 billion, which is in line with the $3.5 billion estimate reported by Reuters. Sklar reported that Couche-Tard would not be able to raise enough new debt to acquire the entire network at that price.

    Of course, it is still unknown if Valero will sell off their retail operations at all, given the tax advantages to shareholders of spinning off the retail unit vs. selling it.

    That’s exactly what Statoil, Exxon, and Royal Dutch Shell have done over the past five years. Couche-Tard is the company who ultimately acquired the Statoil retail stores, and who now operates 3585 stores.

    Comments are closed.