Couche-Tard's Persistent Pursuit of Seven & i Holdings
Despite the rejection of its initial offer, Canadian convenience store giant Alimentation Couche-Tard remains determined to acquire Seven & i Holdings, the operator of Japan's top convenience store chain, 7-Eleven.
Couche-Tard's chairman and founder, Alain Bouchard, emphasized his company's commitment to a "friendly, mutually agreeable transaction," not a hostile takeover. He reiterated his promise to retain local management and expressed confidence that the merger would benefit 7-Eleven's business.
7-Eleven boasts over 20,000 stores in Japan and more than 80,000 outlets worldwide, serving an estimated 63 million customers daily. Despite this impressive reach, Seven & i Holdings rejected Couche-Tard's offer, citing its intention to boost its own corporate value and concerns about potential antitrust issues in the U.S.
In response, Seven & i appointed a new CEO, announced a share buyback, and sold its supermarket subsidiary to U.S. private equity firm Bain Capital. These actions aim to increase the company's value and deter Couche-Tard's acquisition attempt.
Couche-Tard, which operates Circle K stores, initially proposed acquiring all of Seven & i Holdings shares for $14.86 per share in cash. Media reports now suggest an offer of $18.19 per share, or approximately 7 trillion yen ($47 billion).
Seven & i's new CEO, Stephen Dacus, explained the company's rejection in a letter to Bouchard, stating that the proposal did not align with the best interests of shareholders and other stakeholders. However, he expressed openness to further discussions if Couche-Tard presented an offer that fully recognized Seven & i's intrinsic value.
Convenience stores, known as "conbini" in Japan, are deeply integrated into daily life, offering various services like utility bill payments and concert ticket sales alongside everyday goods.
Seven & i has implemented restructuring plans to strengthen its U.S. business and streamline operations, including closing some Ito-Yokado supermarkets in Japan. In 2023, the company sold its Sogo & Seibu department stores in Japan to Fortress Investment Group for $1.5 billion.
Couche-Tard, founded in 1980 in Quebec, operates over 16,800 stores worldwide, offering coffee, beer, snacks, fuel, and lottery tickets. Its presence spans the U.S., Europe, and Asia.
The outcome of this acquisition attempt remains uncertain. Couche-Tard's determination to acquire Seven & i Holdings faces significant challenges, including the company's resistance and potential antitrust concerns. However, the possibility of a future agreement remains open, depending on the terms offered and the evolving strategies of both companies.