Case Documents

COMPETITION TRIBUNAL

PUBLIC VERSION

CT-2022-007

IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, and the Competition Tribunal Rules, SOR/2008-141;

AND IN THE MATTER OF the proposed acquisition by Couche-Tard Inc. or an affiliate thereof, whether directly or indirectly through the acquisition of certain holding entities, of all of the issued and outstanding shares of Barrington Terminals Limited and Cape D’Or Holdings Limited;

AND IN THE MATTER OF the filing and registration of a consent agreement pursuant to sections 92 and 105 of the Competition Act.

B E T W E E N :

THE COMMISSIONER OF COMPETITION

Applicant

– and –

COUCHE-TARD INC.

Respondent

CONSENT AGREEMENT

RECITALS: A. Couche-Tard Inc. (“Couche-Tard”) proposes to acquire, whether directly or indirectly through the acquisition of certain holding entities, all of the issued and outstanding shares of Barrington Terminals Limited and Cape D’Or Holdings Limited (the “Transaction”).

B. The Commissioner has concluded that the Transaction is likely to result in a substantial lessening and/or prevention of competition in the supply of gasoline to retail customers in certain local markets in New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, and that the implementation of this Agreement is necessary to ensure that any substantial lessening and/or prevention of competition will not result from the Transaction.

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PUBLIC VERSION

C. Couche-Tard does not admit but will not for the purposes of this Agreement, including execution, registration, enforcement, variation or rescission, contest the Commissioner’s conclusions that (i) the Transaction is likely to result in a substantial lessening and/or prevention of competition in the supply of gasoline to retail customers in certain local markets in New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; and (ii) the implementation of this Agreement is necessary to ensure that any substantial lessening and/or prevention of competition will not result from the Transaction.

D. Nothing in this Agreement affects any investigation, inquiry or proceeding other than under section 92 of the Act in respect of the Transaction.

THEREFORE Couche-Tard and the Commissioner agree as follows: I. DEFINITIONS [1] Whenever used in this Agreement, the following words and terms have the meanings set out below:

(a) (b) (c)

(d)

(e)

(f) (g)

(h)

“Act” means the Competition Act, R.S.C. 1985, c. C-34, as amended; “Affiliate” has the meaning given to it in subsection 2(2) of the Act; “Agreement” means this Consent Agreement, including the schedules hereto, and references to a “Part”, “Section”, “Paragraph” or “Schedule” are, unless otherwise indicated, references to a part, section, paragraph or schedule of or to this Agreement;

“Business Day” means a day on which the Competition Bureau’s Gatineau, Quebec office is open for business;

“Closing” means the completion of the Transaction under the Transaction Agreement;

“Closing Date” means the date on which Closing occurs; “Commissioner” means the Commissioner of Competition appointed under the Act and includes the Commissioner’s authorized representatives;

“Confidential Information” means competitively sensitive, proprietary and all other information that is not in the public domain, and that is owned by or pertains to a Person or a Person’s business, and includes, but is not limited to, manufacturing, operations and financial information, customer lists, price lists, contracts, cost and revenue information, marketing methods, patents, technologies, processes, or other trade secrets;

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(i)

(j)

(k)

(l)

PUBLIC VERSION

“Couche-Tard” means Couche-Tard Inc. and its Affiliates and their directors, officers, employees, agents, representatives, successors and assigns;

“Couche-Tard’s Continuing Employees” means those employees of Couche-Tard who are not employed in connection with the Wilsons Divested Business;

“Couche-Tard Divested Business” means the Couche-Tard business of marketing and supplying gasoline, diesel, and ancillary products and services at the retail gas station owned and operated by Couche-Tard at the site listed in Schedule D;

“Couche-Tard Divestiture Assets” means all the right, title and interest in, to and under, or relating to the Couche-Tard Divested Business and all of the assets of the Couche-Tard Divested Business of every kind and description whatsoever situated, including but not limited to, the following:

(i)

(ii)

(iii) (iv)

(v)

(vi)

(vii)

the immovable or real property, whether owned or leased by Couche-Tard;

all applicable site-specific licences, permits, contracts, agreements and authorizations, to which Couche-Tard is a party or a beneficiary, used in the operation of the Couche-Tard Divested Business;

the Intangible Assets, if any; the tangible assets and equipment located at the station listed in Schedule D;

all petroleum products and other inventories located at the station listed in Schedule D;

all books, records and files (for greater certainty, to the extent that there are any books, records or files which are common to the Couche-Tard Divested Business and to Couche-Tard’s ongoing business, Couche-Tard shall provide copies of such books, records and files with respect to only the Couche-Tard Divested Business to a Purchaser);

any assets used in any ancillary businesses located at the station listed in Schedule D, including, but not limited to, any automobile mechanical service, convenience store, restaurant or car wash, operated in connection with such station, including, but not limited to, all permits, contracts, agreements and authorizations, to which Couche-Tard is a party or a beneficiary, used in the operation of the ancillary businesses; and

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(m)

(n)

(o)

(p)

(q)

(r)

(s)

(t)

(u)

(v)

(w)

(x)

(viii)

PUBLIC VERSION

related computer hardware located at the station listed in Schedule D;

“Couche-Tard Retained Business” means the Purchased Business, other than the Wilsons Divested Business;

“Designated Personnel” means the employees of Couche-Tard listed in Confidential Schedule E to this Agreement, as modified from time to time by agreement of Couche-Tard and the Commissioner, who shall have signed a confidentiality agreement in a form satisfactory to the Commissioner;

“Divested Business” means the Couche-Tard Divested Business and the Wilsons Divested Business;

“Divestiture” means the sale, conveyance, transfer, assignment or other disposal of the Divestiture Assets to a Purchaser or Purchasers pursuant to this Agreement and with the prior approval of the Commissioner, such that Couche-Tard will have no direct or indirect interest in the Divestiture Assets;

“Divestiture Agreement” means a binding and definitive agreement between Couche-Tard and a Purchaser to effect the Divestiture pursuant to this Agreement and subject to the prior approval of the Commissioner;

“Divestiture Applicant” means Couche-Tard during the Initial Sale Period or the Divestiture Trustee during the Divestiture Trustee Sale Period;

“Divestiture Area” means any of the municipalities listed in Schedules B, C and D;

“Divestiture Assets” means Couche-Tard Divestiture Assets and Wilsons Divestiture Assets;

“Divestiture Process Agreement” means the agreement described in Section 6 of this Agreement;

“Divestiture Trustee” means the Person appointed pursuant to Part III of this Agreement (or any substitute appointed thereto) and any employees, agents or other Persons acting for or on behalf of the Divestiture Trustee;

“Divestiture Trustee Sale” means the Divestiture to be conducted by the Divestiture Trustee pursuant to Part III of this Agreement;

“Divestiture Trustee Sale Period” means the 6 month period commencing upon the expiry of the Initial Sale Period;

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(y)

(z)

PUBLIC VERSION

“First Reference Date” shall have the meaning set out in Paragraph 22(d) of this Agreement;

“Hold Separate Assets” means all of the right, title and interest in, to and under, or relating to, the Purchased Business, and all of the assets of the Purchased Business of every kind and description whatsoever situated;

(aa) “Hold Separate Employees” means those employees of Couche-Tard who are employed in connection with the Hold Separate Assets, and “Hold Separate Employee” means any one of them;

(bb) “Hold Separate Manager” means the Person appointed pursuant to Part VI of this Agreement (or any substitute appointed thereto) to manage the operation of the Hold Separate Assets, and any employees, agents or other Persons acting for or on behalf of the Hold Separate Manager;

(cc) “Hold Separate Period” means the period that commences at Closing and ends upon completion of the Divestiture;

(dd) “Initial Sale Period” means the period that commences at Closing and ends at the time set out in Confidential Schedule A to this Agreement;

(ee) “Intangible Assets” means intellectual property of any nature and kind, including:

(i)

(ii)

(iii) (iv)

patents, copyrights, trademarks and software, including, but not limited to any intellectual property in relation to Wilsons’ electronic settlement portal;

trade dress, industrial designs, distinguishing guises, trade secrets, know-how, techniques, data, inventions, practices, methods and other confidential or proprietary technical, business, research, development and other information, and all rights in any jurisdiction to limit the use or disclosure thereof;

rights to obtain and file for patents and registrations thereof; and rights to sue and recover damages or obtain injunctive relief for infringement, dilution, misappropriation, violation or breach of any of the foregoing;

but for greater certainty shall not include any intellectual property owned by Couche-Tard prior to Closing and not unique to the Couche-Tard Divested Business (e.g., the Circle K convenience store brand);

(ff) “Management Agreement” means the agreement described in Section 29 of this Agreement;

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PUBLIC VERSION

(gg) “Monitor” means the Person appointed pursuant to Part XI of this Agreement (or any substitute appointed thereto), and any employees, agents or other Persons acting for or on behalf of the Monitor, provided that if no Monitor is appointed, other than in Part XI of this Agreement Monitor means the Commissioner;

(hh) “Monitor Agreement” means the agreement described in Section 43 of this Agreement;

(ii)

“Person” means any individual, corporation or partnership, sole proprietorship, trust or other unincorporated organization capable of conducting business, and any Affiliates thereof;

(jj) “Purchased Business” means the Barrington Terminals Limited and Cape D’Or Holdings Limited businesses acquired by Couche-Tard further to the Transaction;

(kk)

“Purchaser” means a Person that acquires Divestiture Assets pursuant to this Agreement and a Divestiture Agreement;

(ll) “Records” means records within the meaning of subsection 2(1) of the Act; (mm) “Second Reference Date” shall have the meaning set out in Paragraph 22(e) of this Agreement;

(nn)

(oo)

“Third Party” means any Person other than the Commissioner, Couche- Tard, Wilsons, or a Purchaser;

“Transaction” means the transaction described in the first recital to this Agreement;

(pp) “Transaction Agreement” means the Share Purchase Agreement, as amended, between James G.C. Wilson, James G.C. Wilson, as trustee of the JGCW Wilson Family Trust (2006), Ian A. Wilson, Ian A. Wilson, as trustee of the IAW Wilson Family Trust (2006), David C. Wilson, David C. Wilson, as trustee of the DCW Wilson Family Trust (2006), Chris E. Wilson, Chris E. Wilson, as trustee of the CEW Wilson Family Trust (2006), Steven K. Wilson, Steven K. Wilson, as trustee of the SKW Wilson Family Trust (2006), Leslie J. Wilson, Leslie J. Wilson, as trustee of the LJW Wilson Family Trust (2006), Gregor F. Wilson, Gregor F. Wilson, as trustee of the GFW Wilson Family Trust (2006), Wilson Fuel Co. Limited and Couche- Tard Inc. dated July 29, 2021;

(qq)

“Tribunal” means the Competition Tribunal established by the Competition Tribunal Act, R.S.C. 1985, c.19 (2 nd Supp.);

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PUBLIC VERSION

(rr) “Wilsons” means Barrington Terminals Limited and Cape D’Or Holdings Limited and their Affiliates, and their directors, officers, employees, agents, representatives, successors and assigns;

(ss) “Wilsons Divested Business” means the Wilsons business relating to marketing and supplying of gasoline, diesel, and ancillary products and services through a corporate retail gasoline site or a fuel supply agreement, as listed in Schedules B and C to this Agreement; and

(tt) “Wilsons Divestiture Assets” means all of the right, title and interest in, to and under, or relating to, the Wilsons Divested Business, and all of the assets of the Wilsons Divested Business of every kind and description whatsoever situated, including but not limited to, the following:

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

the stations listed in Schedules B and C, including the immovable or real property, whether owned or leased by Wilsons and any agreements relating to the consignment or supply of fuel to the retail site;

all applicable site-specific licences, permits, contracts, agreements and authorizations, to which Wilsons is a party or a beneficiary, used in the operation of each station listed in Schedules B and C;

the Intangible Assets used in connection with the Wilsons Divested Business except the Intangible Assets listed in Schedule F which shall be limited to a temporary license and the Intangible Assets listed in Schedule G for which Wilson will provide a perpetual non- exclusive royalty-free license in each instance for use solely at those stations listed in Schedules B and C;

the tangible assets and equipment located at each station listed in Schedules B and C;

all petroleum products and other inventories located at each station listed in Schedules B and C;

all books, records and files specific to the sites listed in Schedules B and C (for greater certainty, to the extent that there are any books, records or files which are common to the Wilsons Divested Business and to Wilsons’ ongoing business, Wilsons shall provide copies of such books, records and files with respect only to the Wilsons Divested Business to a Purchaser or Purchasers);

any assets used in any ancillary businesses located at the stations listed in Schedules B and C, including, but not limited to, any automobile mechanical service, convenience store, restaurant or car wash, operated in connection with each station, including, but not limited to, all permits, contracts, agreements and authorizations, to

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II. [2] [3]

[4]

(viii)

(ix)

(x)

(xi)

PUBLIC VERSION

which Wilsons is a party or a beneficiary, used in the operation of the ancillary businesses;

related computer hardware and proprietary software located at the stations listed in Schedules B and C, to the extent assignable, including all rights under licenses and other agreements or instruments relating thereto (including for greater certainty, the back office, transactional/credit/debit systems, loyalty systems, price reporting software, point of sale software and related equipment);

the fuel branding agreement used in association with those stations in Schedules B and C;

any marketing or promotional program materials and equipment located at the stations listed in Schedules B and C, including without limitation, any loyalty programs, branded bank machines and back wall advertising screen software; and

existing agreements for the supply of products or services with any of the stations listed in Schedules B and C except in the case of existing agreements for the supply of products or services listed in Confidential Schedule H which will either be partially assigned or consent of the relevant suppliers will be obtained to continue to supply non-fuel products or services to the stations listed in Schedules B and C under supply agreements to be entered into directly between the Purchaser and relevant suppliers;

OBLIGATION TO COMPLETE DIVESTITURE Couche-Tard shall use commercially reasonable efforts to complete the Divestiture. During the Initial Sale Period, Couche-Tard shall use commercially reasonable efforts to complete the Divestiture in accordance with the provisions of this Part and Confidential Schedule A and subject to Part IV.

During the Initial Sale Period, Couche-Tard shall provide to the Commissioner and to the Monitor every 30 days a written report describing the progress of its efforts to effect the Divestiture. The report shall include a description of contacts, negotiations, due diligence and offers regarding the Divestiture Assets, the name, address and phone number of all parties contacted and of prospective Purchasers who have come forward. Couche-Tard shall, within 3 Business Days, respond to any request by the Commissioner for additional information regarding the status of Couche-Tard’s efforts to complete the Divestiture. An officer or other duly authorized representative of Couche-Tard shall certify that the information provided in any such response has been examined and is, to the best of that individual’s knowledge and belief, correct and complete in all material respects.

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III. [5]

[6]

[7]

[8]

PUBLIC VERSION

DIVESTITURE TRUSTEE SALE PROCESS In the event that Couche-Tard fails to complete the Divestiture during the Initial Sale Period, the Commissioner shall appoint a Divestiture Trustee to complete the Divestiture in accordance with this Agreement. Such appointment may be made at any time prior to the expiry of the Initial Sale Period or on such later date as the Commissioner determines.

Within 5 Business Days after the appointment of the Divestiture Trustee, Couche- Tard shall submit to the Commissioner for approval the terms of a proposed Divestiture Process Agreement with the Divestiture Trustee and the Commissioner that confers on the Divestiture Trustee all rights and powers necessary to permit the Divestiture Trustee to effect the Divestiture.

Within 5 Business Days after receipt of the proposed Divestiture Process Agreement referred to in Section 6, the Commissioner shall advise Couche-Tard whether or not the Commissioner approves the terms of the proposed Divestiture Process Agreement. If the Commissioner does not approve the terms of the proposed Divestiture Process Agreement, the Commissioner shall prescribe alternative terms that Couche-Tard shall incorporate into a final Divestiture Process Agreement with the Divestiture Trustee and the Commissioner.

Without limiting the Commissioner’s discretion to require additional terms, Couche-Tard consents to the following terms and conditions regarding the Divestiture Trustee’s rights, powers and duties, and shall include such terms in the Divestiture Process Agreement:

(a)

(b)

(c)

The Divestiture Trustee shall complete the Divestiture as expeditiously as possible, and in any event prior to expiry of the Divestiture Trustee Sale Period.

The Divestiture Trustee shall use reasonable efforts to negotiate terms and conditions for the Divestiture that are as favourable to Couche-Tard as are reasonably available at that time; however, the Divestiture shall not be subject to any minimum price. The Divestiture Trustee’s opinion of what constitutes favourable terms and conditions and what constitutes reasonably available terms and conditions, is subject to review and approval by the Commissioner.

Subject to oversight and approval by the Commissioner, the Divestiture Trustee shall have full and exclusive authority during the Divestiture Trustee Sale Period:

(i)

(ii)

to complete the Divestiture in accordance with the provisions of this Part and Confidential Schedule A;

to solicit interest in a possible Divestiture by whatever process or procedure the Divestiture Trustee believes is suitable to allow a fair

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(d)

(e)

(f)

(iii)

(iv)

(v)

PUBLIC VERSION

opportunity for one or more prospective good faith Purchasers to offer to acquire the Divestiture Assets, and for greater certainty, in determining whether to pursue negotiations with a prospective Purchaser, may have regard to the approval criteria in Section 23;

to enter into a Divestiture Agreement with a Purchaser that will be legally binding on Couche-Tard;

to negotiate reasonable commercial covenants, representations, warranties and indemnities to be included in a Divestiture Agreement; and

to employ, at the expense of Couche-Tard, such consultants, accountants, legal counsel, investment bankers, business brokers, appraisers, and other representatives and assistants as the Divestiture Trustee believes are necessary to carry out the Divestiture Trustee’s duties and responsibilities.

Where any Person makes a good faith inquiry respecting a possible purchase of Divestiture Assets, the Divestiture Trustee shall notify such Person that the Divestiture is being made and shall provide to such Person a copy of this Agreement, with the exception of the provisions hereof that are confidential pursuant to Section 69 of this Agreement.

Where, in the opinion of the Divestiture Trustee, a Person has a good faith interest in purchasing Divestiture Assets and has executed a confidentiality agreement, in a form satisfactory to the Commissioner, with the Divestiture Trustee protecting any Confidential Information that such Person may receive in the course of its due diligence review of the Divestiture Assets, the Divestiture Trustee shall:

(i)

(ii)

(iii)

promptly provide to such Person all information respecting the Divestiture Assets that is determined by the Divestiture Trustee to be relevant and appropriate;

permit such Person to make reasonable inspection of the Divestiture Assets and of all financial, operational or other non-privileged Records and information, including Confidential Information, that may be relevant to the Divestiture; and

give such Person as full and complete access as is reasonable in the circumstances to the personnel involved in managing the Divestiture Assets.

The Divestiture Trustee shall have no obligation or authority to operate or maintain the Divestiture Assets.

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[9]

[10]

[11]

[12]

[13]

(g)

(h)

PUBLIC VERSION

The Divestiture Trustee shall provide to the Commissioner and to the Monitor, within 14 days after the later of the Divestiture Trustee’s appointment and the commencement of the Divestiture Trustee Sale Period and thereafter every 30 days, a written report describing the progress of the Divestiture Trustee’s efforts to complete the Divestiture. The report shall include a description of contacts, negotiations, due diligence and offers regarding the Divestiture Assets, the name, address and phone number of all parties contacted and of prospective Purchasers who have come forward. The Divestiture Trustee shall, within 3 Business Days, respond to any request by the Commissioner for additional information regarding the status of the Divestiture Trustee’s efforts to complete the Divestiture.

The Divestiture Trustee shall notify Couche-Tard and the Commissioner immediately upon the signing of any letter of intent or agreement in principle relating to the Divestiture Assets, and shall provide to Couche- Tard a copy of any executed Divestiture Agreement upon receipt of the Commissioner’s approval of the Divestiture contemplated in such Divestiture Agreement.

Couche-Tard shall not be involved in the Divestiture process during the Divestiture Trustee Sale Period or in any negotiations with prospective Purchasers undertaken by the Divestiture Trustee, nor will Couche-Tard have contact with prospective Purchasers during the Divestiture Trustee Sale Period.

Subject to any legally recognized privilege, Couche-Tard and the Hold Separate Manager shall provide to the Divestiture Trustee full and complete access to all personnel, Records, information (including Confidential Information) and facilities relating to the Divestiture Assets, to enable the Divestiture Trustee to conduct its own investigation of the Divestiture Assets and to provide access and information to prospective Purchasers.

Couche-Tard shall take no action that interferes with or impedes, directly or indirectly, the Divestiture Trustee’s efforts to complete the Divestiture.

Couche-Tard and the Hold Separate Manager shall fully and promptly respond to all requests from the Divestiture Trustee and shall provide all information the Divestiture Trustee may request. Couche-Tard shall identify an individual who shall have primary responsibility for fully and promptly responding to such requests from the Divestiture Trustee on behalf of Couche-Tard.