FTC asks Couche-Tard to divest of 35 retail fuel outlets to approve GetGo Café +Markets acquisition
The Federal Trade Commission in the United States announced that it will require Alimentation Couche-Tard Inc. (ACT) to divest itself of 35 gas station, primarily under the Circle K banner, which will be acquired by Majors Management, LLC.
Couche-Tard operates more than 7,100 stores in the United States, primarily under the brand Circle K, and the proposed consent order settles FTC charges that Couche-Tard’s deal with Giant Eagle is anticompetitive and will likely lead to higher fuel costs for consumers across Indiana, Ohio, and Pennsylvania.
In August of last year, Couche-Tard announced it had reached a definitive agreement to acquire GetGo Café +Markets from supermarket retailer Giant Eagle, Inc.
GetGo, a food-first convenience store experience, which employs approximately 3,500 employees and operates 270 convenience retail and fueling locations across Pennsylvania, Ohio, West Virginia, Maryland and Indiana.
“This anticompetitive acquisition threatened to make Americans pay more at the pump by raising fuel prices,” said Daniel Guarnera, director of the FTC’s Bureau of Competition said in a statement posted by the FTC. “The FTC’s action today preserves competition between gas stations that is critical for keeping fuel prices in check. The FTC will keep a watchful eye on retail fuel markets to make sure American consumers can spend less on gas and keep more money in their pockets.”
READ: Couche-Tard to acquire GetGo Cafe + Market stores from Giant Eagle
According to FTC, Couche-Tard’s original proposal for the acquisition of Giant Eagle’s retail fuel outlets would eliminate head-to-head competition across 35 local markets in Indiana, Ohio, and Pennsylvania, the FTC’s complaint alleges.
“In these 35 local markets, ACT and Giant Eagle routinely monitor each other’s prices and currently use that information when setting their own prices for gasoline and diesel fuel. In addition, ACT and Giant Eagle stations are frequently located along the same traffic routes and are geographically close to each other, making them a clear, and sometimes the only, alternative for consumers,” the FTC wrote in its statement.
It was alleged that Couche-Tard “would be able to raise fuel prices unilaterally after the proposed acquisition by eliminating current competition from Giant Eagle. Further, the acquisition threatens to lead to coordinated interaction between the remaining retail fuel outlets, since the merger would reduce the number of independent competitors in each local market. Majors, which will acquire the 35 divested gas stations, is an experienced operator of retail fuel outlets. This transaction will expand its geographic footprint as a new competitor in markets across Indiana, Ohio, and Pennsylvania, ultimately resolving the FTC’s antitrust concerns.”
Under the FTC’s proposed order that along with the required the store divestitures, it is asking:
- The divestiture of the retail fuel outlets must be completed no later than 20 days after Couche-Tard consummates the acquisition;
- Couche-Tard must maintain the economic viability, marketability, and competitiveness of each divested station until the divestiture to Majors is complete;
- Couche-Tard must not re-acquire any divested station for a period of 10 years; and
- Couche-Tard must provide advance notice to the Commission before acquiring any stations designated by the Commission as competitively significant in the local markets of the divested stations for 10 years.
