Couche-Tard To Buy CST Brands For $4.4 Bln; To Sell CST's Certain Canada Assets

(RTTNews) - Alimentation Couche-Tard Inc. (ANCUF.PK, ATD_B.TO, ATD_A.TO) Monday announced a definitive merger agreement to acquire CST Brands, Inc. (CST) in an all-cash transaction for $48.53 per share. The total enterprise value of the deal would be approximately $4.4 billion including net debt assumed.

The terms and conditions of the agreement were unanimously approved by the Boards of Directors of both companies.

The transaction price represents a premium of 42% to CST's closing share price on March 3, 2016, the last trading day prior to CST announcing that it would explore and review its strategic alternatives to further enhance its stockholder value.

The company said the all-cash transaction would be financed by Couche-Tard's available cash, existing credit facilities and a new term loan.

The CST transaction is expected to close in early calendar year 2017 and is subject to the approval of CST's stockholders and regulatory approvals in the United States and Canada.

Further, Couche-Tard said it has entered into an agreement with Parkland Fuel Corp. (PKI.TO) pursuant to which it would sell certain Canadian assets of CST after the merger for approximately $750 million.

The assets in Canada that would be sold include CST's Cardlock business, CST's Dealer and Commission Agents business, CST's Commercial and Home Energy business, a number of company-operated stores to be determined following the Competition Bureau of Canada's review of the transaction and CST's Montréal corporate head office.

This transaction is subject to customary regulatory approval and closing conditions. Couche-Tard intends to use the proceeds from this sale to repay part of its credit facilities.

Upon completion of the transaction, Couche-Tard would establish a new business unit in San Antonio with attached shared services operations.