WHAT HAPPENED:

• Alimentation Couche-Tard Inc. (ACT) is a Canadian corporation and is engaged in the retail sale of gasoline and diesel fuel in the United States. Circle K Stores, Inc. (Circle K) is a wholly owned subsidiary of ACT. Circle K indirectly owns all of the membership interests in CrossAmerica GP LLC, CrossAmerica Partners LP’s (CAPL) general partner.

• Pursuant to three separate Asset Purchase Agreements, dated August 4, 2017, ACT would acquire ownership or operation of all Jet-Pep, Inc. retail fuel outlets. Specifically, Circle K would acquire 18 retail fuel outlets, a fuel terminal and related trucking assets and CAPL would acquire 102 Jet-Pep retail fuel outlets.

• While the purchases did not require an HSR filing, the FTC learned of the transaction, investigated and required remedies before allowing the transaction to proceed.

• The FTC defined the relevant product markets as the retail sale of gasoline and the retail sale of diesel.

• The FTC defined the geographic markets as local markets and identified the three separate geographic markets in Alabama including Brewton, Monroeville and Valley.

• In its complaint, the FTC alleged that post-merger the “number of competitively constraining independent market participants” would be reduced “to no more than three in each local market.”

• The FTC alleged that the proposed acquisition would result in (1) an increased likelihood that ACT would unilaterally exercise market power in the relevant markets; and (2) an increased likelihood of collusive or coordinated interaction between the remaining competitors in the relevant markets.

• The FTC accepted a consent order in which ACT agreed to divest certain Jet-Pep retail fuel outlets and related assets to remedy concern in three local geographic markets in Alabama. ACT must complete the divestiture to a Commission-approved buyer within 120 days after the acquisition closes.

WHAT THIS MEANS:

• This consent decree is a reminder that even when a transaction is not HSR reportable, the transaction may still be reviewed and challenged by the FTC and DOJ.

• Local geographic markets are highly fact specific. Factors used to determine local geographic markets for retail gasoline and retail diesel include: commuting patterns, traffic flows and outlet characteristics unique to each market.

• If the proposed divestiture package is something less than a complete, autonomous and operable business unit, the parties must show that their proposed package will enable the buyer to maintain or restore competition in the market.

• FTC and DOJ may not require a buyer-up-front where they have significant experience in the industries at issue, and where the ownership interest is a high-value, low-risk asset (e.g., retail fuel business) that is likely to generate substantial interest from more than one potentially acceptable buyer.