Oil giant to sell Circle K to Canadian firm

HOUSTON -- ConocoPhillips is selling its convenience store chain Circle K Corp. to Canada's Alimentation Couche-Tard Inc. for about $821 million, advancing the big oil company's plan to shed retail marketing sites and cutting its work force by 31 percent.

The agreement disclosed Monday would create a retailer with more than 4,500 owned or franchised convenience stores in the United States and Canada. Alimentation is also assuming $9.1 million in debt in the deal.

ConocoPhillips, the nation's third-largest oil company, said the Circle K sale will cut its work force by about 17,400 employees to a worldwide total of 38,400.

Alimentation, based in Laval, Quebec, said it expects to retain the "vast majority" of those displaced employees. It already operates more than 2,500 convenience stores across Canada and in the Midwest with 20,100 employees.

Circle K has 1,663 retail marketing outlets in 16 states and the Circle K brand, as well as more than 350 franchised and licensed stores.

The chain sells fuel at about 86 percent of its locations. As part of the agreement, ConocoPhillips also will supply Alimentation 1.2 billion gallons of gasoline per year for the next two to five years at market-based prices.

The deal requires regulatory approval but is expected to close in the fourth quarter, the companies said.

Houston-based ConocoPhillips, which merged in August last year, has sold $2.7 billion in assets so far this year with a goal of selling $3 billion to $4 billion by 2004. The Circle K sale would push that total to more than $3.5 billion.

Shedding of retail and other marketing sites, including service stations, is part of the company's post-merger consolidation plan. Company officials expected ConocoPhillips' head count to drop to the mid-30,000 range when those sales are complete.

"Additional asset dispositions are continuing," ConocoPhillips said.

Jim Nokes, ConocoPhillips' executive vice president of refining and marketing, said the Circle K sale is a "significant step" toward the company's consolidation efforts.

Once the sale closes, ConocoPhillips will focus on its wholesale business. But the company will retain 300 to 350 retail outlets, mostly in the central and West coast regions, with the Conoco, Phillips 66 and 76 brands.

Alain Bouchard, chairman, president and chief executive of Alimentation, said the acquisition will increase the Canadian company's presence in the United States "with significant growth opportunities."

ConocoPhillips shares rose 47 cents Monday to close at $56.40 on the New York Stock Exchange.

Copyright C 2003 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.