The Offer and Investor Reaction
Alimentation Couche-Tard Inc., the Montreal-area owner of the Circle K brand, wants to buy Żabka Group SA, a Polish convenience-store chain, for $8.7 billion. It would be the biggest acquisition Couche-Tard has ever made.
CEO Alex Miller knows some shareholders will fight for a better price. "I'm sure there is no scenario where there won't be positioning, angling, trying to get us to raise the price," he said. "I don't see any scenario where that wouldn't happen."
The offer is backed by Żabka's executives and its private-equity investors, among them CVC Capital Partners and Partners Group. Those supporters control about 57% of the retailer's shares. At a 95% threshold of Żabka's voting rights, Couche-Tard plans to force out the remaining shareholders and remove the company from the Warsaw exchange.
Miller drew a comparison with Couche-Tard's 2012 purchase of Norway's Statoil Fuel & Retail ASA. "There was a lot of different posturing," he said. "We went through that."
RBC analyst Irene Nattel said that on an enterprise-value basis, the offer was worth about 10 times Żabka's adjusted EBITDA, calling the multiple "reasonable for a business with 28 years of uninterrupted double-digit top-line growth."
"This deal fits right inside our financial framework that you always hear us referencing," Miller said.
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Executives declined to say whether they could raise the bid for the Polish chain. "We believe that we have a very attractive price, a very significant premium," CFO Filipe Da Silva said. "We're confident that we will be able to increase the stake with this price."
In Warsaw, Żabka shares gained 12% before falling back to a level just under the 32-zloty bid. Last week, Japan's Seven & i Holdings Co. said it had stopped discussing a possible stake in the company.
Miller said Couche-Tard, with nearly 400 convenience stores and fuel sites already across Poland, had pursued Żabka and its 13,000-plus stores for years before making its first approach only a few months ago. This followed Couche-Tard's unsuccessful bid for Seven & i, which it withdrew in July 2025.
What Couche-Tard Sees in Żabka
The typical Żabka shop spans roughly 700 square feet. "That's a lot smaller than our stores in the US and in Canada and in Europe, and yet they have 2,500 SKUs," Miller said.
More than 17 million people live within a 500-meter walk of a Żabka, where customers can pick up groceries as well as hot food and drinks.
Couche-Tard gets most revenue from fuel but wants to expand food sold inside stores, especially in North America. Food carries healthier margins, though adapting it to local preferences can be difficult. "This can be transformational for us," Miller said.
"What you will see is a lot more food, a lot more ready-to-eat items, a broader selection, a big bakery selection, kind of big milk-yogurt selection," Miller said. "And then you're going to see bright colors, and a lot of digital."
Couche-Tard leaders lauded Żabka's tech strengths: loyalty programs, online retail, data analytics, and automated restocking. The Canadian retailer has likewise advanced its own technology recently.
Żabka will retain its own management; Tomasz Blicharski, the incoming CEO, will report directly to Miller. Żabka also has set its sights on Romania, where it has 250 Froo stores after two years and could eventually reach as many as 7,000 locations.
Financial Details and Next Steps
The takeover is being paid for entirely with debt, lifting Couche-Tard's net debt-to-adjusted-EBITDA ratio from about two times to roughly three times. "I don't believe this prohibits us from doing other M&A, even sizable M&A," Miller said.
Couche-Tard shares traded 1.9% higher late Friday afternoon in Toronto.
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