Alimentation Couche-Tard, the convenience-store giant that owns the Circle K chain, said it is exploring a deal with French grocer Carrefour, which would represent a major strategy shift for the Canadian firm. Couche-Tard said on Tuesday it has started “exploratory discussions” on a friendly deal with Carrefour, confirming an earlier Bloomberg report. There is no certainty the talks will lead to a transaction, the Quebec-based company said. Shares of Carrefour have risen 10 per cent in Paris trading this year, giving the company a market capitalisation of €12.6 billion ($15.4bn) at Tuesday’s close. Couche-Tard shares slipped 2.2 per cent after the initial Bloomberg report, closing at $41.31 Canadian dollars ($32.48) in Toronto to value the company at almost $36bn. Representatives for Carrefour couldn’t immediately be reached for comment. Couche-Tard’s focus has been convenience stores and fuel stations, not supermarkets. It has built an empire by methodically acquiring smaller rivals, first at home in Canada before entering the US in 2001 and Europe in 2012. Lately its focus had been on the US and Asia Pacific regions, where it tried to buy Caltex Australia before deciding against a revised offer during the pandemic. A deal with Carrefour would expand its presence in Europe, where its potential target operates more than 2,800 supermarkets and 703 larger-format hypermarkets, and in Latin America, where it has stores in Argentina and Brazil. Couche-Tard, which started from a single store in a Montreal suburb in 1980, has a no-frills reputation, with top management known for visiting scores of stores before making acquisitions to spot the weaknesses. It agreed in 2016 to buy US fuel station operator CST Brands for around $4bn, and gained a foothold in Scandinavia and the Baltic region through its 2012 purchase of Statoil Fuel & Retail. Last year, it was among potential suitors competing to acquire US gas station operator Speedway, which was eventually sold to Seven & I Holdings for $21bn. Couche-Tard has a network of more than 9,000 convenience stores in North America, most of which also offer fuel retail, according to its website. It also had about 2,700 locations in Europe as of October last year. Any transaction would add to the $182bn of deals announced in the retail industry over the past 12 months, according to data compiled by Bloomberg. Convenience store operators have been expanding into the supermarket industry, including in the UK, where TDR Capital teamed up with the petrol station entrepreneurs behind EG Group in October to acquire a majority stake in grocer Asda from Walmart. A pioneer of the hypermarket format, Carrefour lost ground in recent years to Leclerc and German discounters in France, while forays into overseas markets such as Latin America and China have produced mixed results. Carrefour sold an 80 per cent stake in its China unit two years ago to local retailer Suning. It had about €5.2bn in net debt as of June last year, down from almost €6bn euros a year earlier, partly due to proceeds from the China deal. Under chief executive Alexandre Bompard, Carrefour has cut costs by scaling back the company’s giant stores, which sell everything from produce to clothing and housewares, while expanding in e-commerce and organic food. France has been one of Europe’s toughest retail markets, with subdued economic growth curbing consumer spending while intense competition among grocers has squeezed pricing and margins. In 2018, Carrefour struck a purchasing alliance with the UK’s Tesco to increase their clout with suppliers.