Circle K and Corner Stores Merger/Acquisition - Impact on and Perception of Customers and Investors
In the wake of the merger/acquisition of Circle K and Corner Stores, the below perception of investors and customers followed the merger/acquisition, along with some notable impacts, some of which are in the positive and in the negative.
THE PERCEPTION OF INVESTORS
- A spokesman for the National Association of Convenience Stores believes the acquisition is a result of Circle K's aggressive competition with its rival.
- Couche-Tard CEO Brian Hannasch believes the acquisition of Corner Stores will come with a strategic value that will ultimately improve the network of Circle K.
- The CEO is also of the opinion of the emergence of new opportunities owing to the expertise and experience that will be deployed by Circle K.
- Going forward, investors and analysts are of the opinion that the acquisition will afford Circle K to focus less on fuel sales and increase food sales.
- The acquisition puts an investment company like Empire Petroleum Partners LLC on the throes of history with the following comments from its chairman, "the transaction also signals a considerable stride forward as Empire successfully executes on its acquisition goals, delivering meaningful US expansion."
THE PERCEPTION OF CUSTOMERS
- An analyst/customer said the acquisition of Corner Stores by Circle K will provide "a leg up in the convenience store industry’s shift toward in-store sales of fresh food."
- A customer thinks the acquisition is a 'good fit' for Circle K because the latter is more of a corporate-owned store group compared to Corner Stores' clean in-stores.
- Another customer is worried about the fear of lack of divestitures in the Corner Stores transactions due to the avalanche of ownership of store branches by Circle K within such proximity in Louisiana, Lafayette in particular.
- The perception of a customer in Phoenix is that the acquisition will engender the further dominance of Circle K in the area.
- A customer is concerned about how Circle K intends to assimilate the conversion of the Corner Stores brand, believing the former does not have what it takes to fully convert the latter's customers to theirs.
- The inconsistency in the services of Circle K across its US stores is poses concern for another customer in the wake of the acquisition.
- A customer's perception of the acquisition is regarded as a 'hit-and-miss', believing the failure of the transaction is inevitable.
IMPACT OF THE MERGER/ACQUISITION
- The impact of the merger/acquisition is the creation of a healthy "race to the top" competition between Circle K and 7-Eleven Inc.
- Another expected impact expected is the strategic value Corner Stores will add to Circle K's network.
- Due to the acquisition, Circle K will be able to avoid the volatility in the prices of gas and concentrate more on the sales of fresh foods.
- The acquisition created the largest acquisition in the history of Empire Petroleum Partners LLC, as the latter was able to enter an asset purchase agreement with Circle K towards the acquisition of 70 Corner Store gas stations.
- As a result of the acquisition and the consequent asset purchase agreement, Empire's geographic reach was expanded in the US.
- The acquisition led to the selling off of the Canadian assets of Corner Stores and the ongoing re-branding of Corner Stores across all locations.
- One of the major impacts of this merger/acquisition is the tendency of creating a monopoly, as already expressed in areas such as Louisiana and Phoenix.
We went on with this research by breaking it into three segments: investors' perception, customers' perception, and the impact of the merger/acquisition.
For the investors' perception, we examined some narratives and comments from industry leaders like the CEO of Alimentation Couche-Tard and the Chairman of Empire board of members, along with a top personality like the spokesman of the National Association of Convenience Stores to form our investors' perception of the acquisition.
We dived into the customers' perception by looking at the various opinions of customers in their feedback to a trend started by another customer in the wake of the merger/acquisition between Circle K and Corner Stores.
Lastly, we examined reports from news sites like CSP Daily News, Biz Journals, among others, to determine the positive and negative impacts generated by the merger/acquisition.