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Couche-Tard, CrossAmerica agree to exchange assets

Canadian convenience store operator Alimentation Couche-Tard Inc. and motor fuel distributor CrossAmerica Partners LP said Dec. 17 that they have entered an agreement for a series of asset exchanges expected to occur over a period of two years.

Couche-Tard agreed to sell 192 company-operated Circle K convenience and fuel retail stores in the U.S. to CrossAmerica for approximately $184.5 million.

In turn, CrossAmerica will sell assets amounting to $184.5 million to the Canadian retail group. These assets include real estate for 56 company-operated convenience and fuel retail stores in the U.S. currently leased by Couche-Tard, as well as 17 CrossAmerica-owned and -operated convenience and fuel retail stores in the U.S. upper midwest area.

The existing fuel supply arrangements for the 56 leased properties will remain unchanged, according to the release. Meanwhile, the Circle K stores to be sold to CrossAmerica will remain with Couche-Tard until dealers are secured to operate the stores.

The companies expect the first transaction to take place in the first half of 2019. They also do not expect additional funding to be required for the asset exchange.

"We believe this transaction will be beneficial to both parties. The transfer of Couche-Tard's retail stores to CrossAmerica will help optimize the long-term value of these assets, further strengthens Couche-Tard's core retail business and is a win-win for both sets of stakeholders," Couche-Tard President and CEO Brian Hannasch said in a statement.

CrossAmerica said it expects the transactions to be accretive to distributable cash flow to its limited partners.