Canada petrol king shows belated faith in own plan

LONDON, March 16 (Reuters Breakingviews) - Alimentation Couche-Tard (ATD.TO) is expanding its empire of petrol station rest stops. On Thursday, the $44 billion Canadian gas station giant said it would buy some of TotalEnergies’ (TTEF.PA) European assets for 3.1 billion euros. That means the business is being sold for around 8 times the EBITDA it generated in 2022, about the same multiple on which Couche-Tard trades. Hence the buyer is not paying over the odds.

The swoop is also a sign that Couche-Tard is more confident in its own business model than in the recent past. In 2021, the Canadian group attempted to buy French grocer Carrefour (CARR.PA) but was blocked by Emmanuel Macron’s government, which raised concerns about food sovereignty and security. Back then, it seemed Couche-Tard was looking to diversify its empire of highway rest stops. With the European Union set to phase out new sales of petrol-fuelled cars by 2035, reversing out of gas stations made sense.

Drivers may of course use convenience outlets while they wait to charge electric vehicles. But if EV battery power or home-charging facilities improve, Couche-Tard’s business model may not stack up. For now it seems stuck in double-down mode. (By Aimee Donnellan)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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