Couche-Tard (ATD) has shelved their acquisition plans for Caltex amid the uncertainty and negative financial impact of COVID-19.
The Canadian convenience giant has announced that while they view Caltex as a ‘strong strategic fit’ for their brand and an ‘important component for its Asia Pacific expansion strategy’, they will not proceed with the $8.8 billion proposed deal.
However, ATD stated they remain ‘highly interested’ in formalising a transaction, once both parties are in a clearer financial position. Adding the uncertainty of the global pandemic and the negative impact on the industry had forced the decision, and their present focus was on managing their own business through the period.
It comes as oil prices hit a new historic low this week as US crude oil prices turned negative as drops in global fuel demand impacts storage capacity, impacting sales and with any buffering from OPEC’s decision to cut production by an initial 9.7 billion barrels per day yet to flow on to the market.
In Australia, Caltex has brought forward a planned maintenance shut-down of their Brisbane refinery in a bid to soften the economic hit.
In a statement released on their decision, ATD’s president and CEO Brian Hannasch said they remain optimistic the deal will proceed at a later date.