File photo: One of the stores of the chain shop Couche-Tard in Province of Quebec, Canada. Photo: AFP

Canadian convenience store operator Alimentation Couche-Tard Inc has entered the Asian market through a deal to buy Convenience Retail Asia's Hong Kong unit for HK$2.79 billion ($359.8 million), the companies said on Thursday.

The Circle K convenience stores and Saint Honore bakery chain operator plans to declare a special dividend of HK$3.85 per share to its shareholders, with the dividend to be paid before the end of 2020, Convenience Retail Asia said in a filing to the Hong Kong bourse.

The convenience store business, with a net asset value of HK$622 million as of end-June 2020, comprises 340 Circle K stores in Hong Kong. 

The net proceeds will be used to pay the special dividend, the Hong Kong-listed company added.

The unit, which holds the second-largest market share in Hong Kong, will be acquired by Couche-Tard on a cash-free and debt-free basis, the Canadian company said in a separate statement.

The deal will be financed through available cash on hand and is expected to close by December 31.

In September, Couche-Tard's quarterly earnings beat estimates, as customers spent more on groceries at its stores, while a fall in fuel prices boosted profit margins at its gas stations. 

A coronavirus-led slump in fuel demand brought its total revenue down 31.4 percent to $9.71 billion.

Reuters