Quebec-based Alimentation Couche-Tard Inc. will soon operate all Blue Canoe, Mainways and Big Stops

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SAINT JOHN - Irving Oil is saying goodbye to its Blue Canoes as it exits the convenience store business in Atlantic Canada and New England.

The privately-owned Saint John-based energy company is handing over its Mainways, Blue Canoes and Big Stops to Quebec-based Alimentation Couche-Tard Inc. (TSX:ATD.B), North America's second largest convenience retailer.

Under the 20-year deal, Couche-Tard will lease 252 Irving-owned and franchised stores. The partnership includes fuel and convenience store revenue sharing.

"We think this really is a marriage made in convenience retail heaven," said Harry Hadiaris, director of the business-to-consumer marketing at Irving Oil.

"The partnership will create more growth opportunities for both of our companies in the northeast, including the southern New England states and New York, New Jersey and Pennsylvania."

The Irving convenience stores will be re-branded. Couche-Tard operates its stores under the Couche-Tard and Mac's brands in Canada and Circle-K in the United States. Big Stops will retain their existing branding.

Gas pumps will retain the Irving brand and the company will continue to supply fuel to the stores.

Hadiaris said the partnership will allow both companies to focus on what they do best.

"It will ... give our company the opportunity to focus on our core business of processing and marketing clean fuel to our customers," he said. "Couche-Tard is a world-class leader retailer, they are a leader in our industry. They operate excellent stores."

The Couche-Tard deal comes on the heels of Irving Oil's recent partnership with oil giant BP to explore the feasibility of a second oil refinery in Saint John.

Hadiaris said the was no relationship between the Eider Rock oil refinery project at the Couche-Tard deal.

Irving Oil first partnered with Couche-Tard in 2001. Under that deal, 56 Irving Mainway stores converted to the Couche-Tard brand. Couche-Tard operated the stores while Irving Oil supplied the liquid fuel. In 2003, Irving Oil leased 16 stores and stations in Atlantic Canada to the Canadian Tire Corporation.

Michel Bernard, Couche-Tard's vice-president of operations for Eastern Canada, said the acquisition of the 252 Irving stores presents a strategic opportunity for his company to grow its business in the northern United States and Atlantic Canada.

At an average of $1.1 million in sales, the 252 store deal represents annual revenues of roughly $277 million. It is not known if there will job losses or gains as a result of the deal, which still must receive federal regulatory approval.